English for Accountants

S. 2353. Themenorientierte Textbausteine

Konzern

1. Scope of Consolidation

Investments in joint ventures and affiliated companies in which the Company has significant influence, but not a controlling interest, are accounted for using the equity method. This is generally presumed to exist when the Company owns between 20 percent and 50 percent of the investee. Under certain circumstances, the Company’s ownership is between 20 percent and 50 percent of the investee but it consolidates the investment because the Company participates in significant operating and financial decisions of the investee.

Under the equity method, the Company’s investment in and amounts due to and from an equity investee are included in the Consolidated Balance Sheets; the Company’s share of an investee’s earnings is included in the Consolidated Income Statements; and the dividends, cash distributions, loans or other cash received from the investee, additional cash investments, loan repayments or other cash paid to the investee, are included in the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows. Additionally, the carrying values of investments accounted for using the equity method of accountin...