Cash Flow Statement

Equity Method If owned shares are 25% or more then Significant influence so Equity Method is used eg. Take 25% of income Investment Income = Less % of Dividends Paid + % of Net Income + Impairment Calculation + Amortization of Excess Payment of FV of Assets Note: Do not record Share Price Increase or Decrease 2013-24, 2013M1-31, 2008-82

Co. Q’s share of the excess of fair value over book value of the asset should be amortized over the life of the asset and charged against investment income in Co. Q’s income statement

Cost or Equity Method APSE Rules If % > 25 and shares are Private (ie there is no quoted market values); you can use Cost OR Equity Method If % > 25 and shares are Public (ie there is no quoted market values); you can use Fair Value though Net Income Income OR Equity Method 2013-24, 2010-84, 2008-82, 2007.76. 2013M2-29

Goodwill (Don’t Use Calculation) "Goodwill=
Cash Paid
-FV of Net Assets (BV + FV adjustments)
+ NCI (based on FV of Net Assets)
"
Note: If the Full Price (Controlling + Non Controlling) is given, use the Full Price * (Non Controlling %) instead of the NCI (based on FV of Net Assets) - 2013M2-54 2007-92, 2008-90 Goodwill for Consolidate Balance Sheet (IFRS - Public Company) "Fair value Based on Purchase on Jan 1($808,000+$292,000) $1,100,000
Carrying value of FI’s identifiable net assets (given) 897,000
Fair value Difference 203,000
Fair value increment - (CV - FV) 130,000
Balance allocated to goodwill $73,000"

2013-31, , 2013M1-54, 2013S-38, 2013M2-53 Consolidated Net Income Take 80% of Child: Net Income ADD: Dividend Received ADD: Decreases in FV Difference