Common Shareholders Equity in Equity Method

ishpal.s.chandok
Posts: 1
Joined: Sun May 10, 2015 6:47 am

Common Shareholders Equity in Equity Method

Postby ishpal.s.chandok » Sun May 10, 2015 6:55 am

Hi,

I recently solved a case study for FRA in Level 2.. (Case Study 8)

Have 2 Doubts...

1. in Q1 we were asked to calculate the common shareholders equity under Acquisition method. I added the Minority Interest to calculate same... The answer stated that I should not add Minority Interest. Doesn't Minority Interest go in equity?

2. in Q2 they asked the same thing but with equity method. As per me the common shareholders equity would not change from is original... .due to some reason they rote 30k (i.e. just the common stock component without retained earnings)... seems incorrect but wanted to confirm just in case.

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Re: Common Shareholders Equity in Equity Method

Postby edupristine » Wed May 13, 2015 12:02 pm

1. Shareholder Equity = Total asset - Total liabilities, Hence Minority interest will come under total liabilities section because we doesn't own this.
2. Could you please send me your solution file, So that i can answer it easily.


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