Equity method - theproffitfactory

A consolidation accounting procedure that is applied to associated companies, multigroups that have opted for it, and those group entities (subsidiaries) excluded from the global integration method (because they do not have a significant effect on the consolidated financial statements). This method consists of replacing or updating the book value of a parent company’s investment in a subsidiary, taking into account the net equity of the subsidiary and not the cost of acquisition of the investment.