Definicja proportion of equity method (EC-CS)

Co znaczy PROPORTION OF EQUITY METHOD (EC-CS):

A variant of the equity method of consolidation.

The equity method has two variants:

One-line consolidation (also called book value method) Two-line consolidation (also called proportion of equity method)

By contrast to the one-line variant, in two-line consolidation the difference between the investment book value (of the parent) and the proportional share in the stockholders' equity (of the subsidiary) is stated as a separate item in the balance sheet.

This difference is recorded as goodwill and reduces the value of the investment item.