Cost vs. Equity method of Accounting for Investments in Common Stock
Summary of APB Opinion No. 18
Basic problem--equity method
Summary Points of the Equity Method
Comprehensive problem -- equity method
Notes on handout problem
Summary Points of the Cost Method
Illustrations of selected provisions of paragraph 19
Illustration of changing from cost to equity method
Notes on liquidating dividends
Income smoothing with the Cost Method
Illustration of Income smoothing with the Cost Method
Changes brought about by FAS No. 142, Goodwill and Other Intangible Assets
Review Questions
Return to Topical Outline
return to contemporary accounting issues
Income
smoothing
with
the Cost Method Illustration of
Income smoothing
with the Cost Method