Expanding the frontiers of the equity method

✍ Scribed by Oscar J. Holzmann; Thomas R. Robinson

• Publisher: John Wiley and Sons
• Year: 2004
• Tongue: English
• Weight: 48 KB
• Volume: 16
• Category: Article
• ISSN: 1044-8136
• DOI: 10.1002/jcaf.20092

✦ Synopsis

A total of seven Emerging Issues Task Force (EITF) consensuses have become effective during 2004. Of these, three concern accounting for investments, two deal with revenue recognition issues, and the remaining two address earningsper-share determination and asset impairments in business combinations, respectively. Of the three concerning accounting for investments, EITF 02-14, Whether an Investor Should Apply the Equity Method of Accounting to Investments Other Than Common Stock, is particularly interesting for believers in representational faithfulness who have also long held that substance ought to prevail over form in applications of the equity method of accounting. This article reviews this new EITF standard.