To account for these shares using equity method.this case, the participation in the share capital of the investee company in excess of 20%, suggests that the investor shall include in its report to the appropriate share of the profits or losses of a controlled entity , such investments are not only easy to obtain dividends. Such companies are called sister or associate, the Civil Code of the Russian Federation - dependent.are three main features of the method:
The investor takes into account the acquired shares at cost;
Part of the net earnings of the investee company's investor records an increase, and losses - in the reduction of investments;
Dividends received by investors include the increase in cash and reduced investment. [10], the present value of the investment on the balance sheet consists of the following elements: the cost of the + appropriate share of profits - an appropriate share of losses - receive/dividends received.noted above, the establishment of control is called the parent company of the investor and investee company - a subsidiary. In this case we need to draw up consolidated accounts.the one hand, each of these companies is a separate legal entity and of its financial statements, on the other hand, because of the special relationship and communication between the subsidiary and the parent company, they are treated as a single unit and prepare the general statements, called consolidated. (absorption). Previously described method of acquisition by purchase has its own problems: first of all in this method need for costly re-evaluation, but also requires the investor has available cash resources. The alternative he advocates are increasingly used pooling investor invested company, pursuant to which requires a small amount of cash and shares are exchanged for shares of the investor investee. It avoids the payment of taxes, and the shareholders are not deprived of property rights, because in return get a new old stock (although often this exchange ratio is clearly not beneficial to the former owners). At the confluence of the right may be acquired not only the parent company, but the company is not part of the group, or distributed among several companies.characteristic features of the method of merger (absorption):
Assets and liabilities are not carried and are not adjusted;
Investments are shown at face value;
Income received by a subsidiary before the merger are included in the consolidated financial statements.of this method is permitted in the following cases:
The parent company trades more than 90% of the nominal capital of the subsidiary;
Exchange of shares of the parent company for the shares of the subsidiary;
Payments in cash should not exceed 10% of the nominal value of the issued sh...
