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What is equity method?
Those who are students of accounts will face the equity theories and they need to explain them with details. If you are new in this accounting field, equity method is that method in the process of accounting where the investments in equity are treated in the associate companies. Equities are treated as assets by these investors.
The share in proportion of the company’s net income raises the investment and the net loss lowers the investment as well. You can do equity accounting method when there is 30-50% of stock of voting held by a company. The decision on equity charges solely depend on a company and the board of directors of that particular company. So, it is very important to maintain a correct equity ratio.
What are the important points to be noted?
Equity method homework help seeks to teach you certain points that are important while you deal with equity method. The first one says that relationship between the investor and the invested should be taken care of. Secondly ownership of 50% and more will always create a subsidiary and the subsidiary should be taken care of.
Then, thirdly, market survey should be done to know the accounting tallies with other companies as well. What are the gains and expenses and losses and incomes should be taken care of too. Teachers in homework help show you graphs and figures that are genuine and show the correct values.
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