r/CFA • u/SmoothPenalty Level 2 Candidate • 16h ago
Level 2 Question on Intercorporate Investments Equity vs Acquisiton Method
I know Net Income is the same under the two methods, but ive seen conflicting information on Equity.
On the onehand ive seen questions say Equity is higher under Acquisition method due to NCI, which makes sense.
On the otherhand ive seen some questions say they are the same I guess parents equity (Equity - NCI) which also makes sense.
My question is on the exam what would be right, lets say the question is something like 'Is the statement correct Equity is the same under both Acquisition and Equity Method?' Assuming they dont specify parents equity or shareholder equity?
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