When I first read this chapter it seemed straightforward, but now I'm doing problems and it's extremely confusing! Does anyone have handy points about the salient features of controlling interest, significant influence, equity method of accounting, proportionate consolidation, pooing of interests, full goodwill, partial goodwill?

Hi @sophie, I'm trying to sort out which items are included at what percentage for these different methods, and where they are included. I think I'll go through the chapter and try to make a table or something.

Hey @shantala, let me know if this table helps: OwnershipDegree of Influence / ControlUS GAAP MethodIFRS Method Less than 20%No significant influenceDepends on security classificationSame as US GAAP 20% - 50%Significant influenceEquity methodSame as US GAAP Each party owns 50%Shared controlEquity methodChocie of equity method or proportionate consolidation More than 50%ControlAcquisitionSame as US GAAP

A CFA Level 2 Discussion About Level 2 Reading 19: Intercorporate Investments

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This topic has 10 replies, 5 voices, and was last updated Apr-178:32 am by Sophie Macon.

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MockTurtle
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04 Apr 2017 at 8:16 pm
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When I first read this chapter it seemed straightforward, but now I’m doing problems and it’s extremely confusing! Does anyone have handy points about the salient features of controlling interest, significant influence, equity method of accounting, proportionate consolidation, pooing of interests, full goodwill, partial goodwill?
MockTurtle
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04 Apr 2017 at 8:19 pm
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Hi @sophie, I’m trying to sort out which items are included at what percentage for these different methods, and where they are included. I think I’ll go through the chapter and try to make a table or something.

christine

Participant

04 Apr 2017 at 8:39 pm

Hey @shantala, let me know if this table helps:

Ownership	Degree of Influence / Control	US GAAP Method	IFRS Method
Less than 20%	No significant influence	Depends on security classification	Same as US GAAP
20% – 50%	Significant influence	Equity method	Same as US GAAP
Each party owns 50%	Shared control	Equity method	Chocie of equity method or proportionate consolidation
More than 50%	Control	Acquisition	Same as US GAAP

Sophie Macon
Keymaster
04 Apr 2017 at 8:45 pm
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Just a little @diya. I blame using 8 fingers to type instead of full 10. My pinkies have zero strength. =))
MockTurtle
Participant
04 Apr 2017 at 8:43 pm
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Thank you so much @christine!
Sarah
Participant
04 Apr 2017 at 8:43 pm
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@Sophie did you guys have a competition on who could make a table first :p
Zee Tan
Keymaster
- CFA Charterholder
04 Apr 2017 at 11:07 pm
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Obviously I lost. Shouldn’t have taught how to use tablizer to @christine…
Sarah
Participant
05 Apr 2017 at 8:16 am
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Interesting fact @Sophie but your pinky is not your weakest finger. What is your typing speed? I’m curious…
Sophie Macon
Keymaster
04 Apr 2017 at 8:17 pm
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Hi @shantala, what aspect in particular? Is there any question that created the confusion? Trying to narrow down the broad question here 🙂
Sophie Macon
Keymaster
04 Apr 2017 at 8:38 pm
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Ah, give me (or @zee or @christine) 10 min. I’m trying to figure out how to make tables too :”> “
Sophie Macon
Keymaster
05 Apr 2017 at 8:32 am
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Slow as a tortoise. I ain’t no Gen-X speed typer, I’m ancient remember? 😛

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