Consolidating equity investment Live sex cam 2way
On the other hand, if the stock dropped to .50 per share, this would reduce the investment's value to million.
The balance sheet value would be written down to reflect the loss of a deferred tax asset established to reflect the deduction that would be available to the company if it was to take the loss by selling the shares.
Unless you delved deep into the company's 10-K, you may not even realize that the Saks dividend income is included in total revenue as if it were generated from sales at Federated's own stores.
Under this scenario, the company would not be able to report its share of Saks' earnings, except for the income from any dividends it received on the Saks stock.
The asset value of the investment would be reported at the lower of cost or market value on the balance sheet.
This means that, if Federated purchased 10 million shares of Saks stock at per share for a total cost of million, it would record any dividends received from Saks on its income statement.
This is sometimes called a non-controlling interest.
The amount of interest held in the subsidiary is typically less than 50 percent; otherwise, the corporation would no longer be a subsidiary to the parent company.