Consolidator Cost Method

Use Consolidator Cost Method when the amount of investment in a company is less than 20% and is held for at least one year. Only three calculations are performed and added to the consolidated parent:

  • Dividends from Investments: Cost (v1190) account is increased by the ownership percentage times the investment's cash dividends (v1900 Total Common Dividends);

    Parent's v1190 = Ownership% x investment's v1900

  • In the valuation adjustment for Cost and Equity methods, SVA (v5.00.900) increases by the ownership percentage times the investment's SVA value (v5070 Shareholder Value):

    Parent's v5.00.900 = Ownership% x investment's v5070

  • In valuation adjustment for Cost and Equity methods, EP (v5.00.910) increases by the ownership percentage times the investment's EP value (v5790 Economic Profit Shareholder Value):

    Parent's v5.00.910 = Ownership% x investment's v5790

    Note:

    The opening balance for the investment account (v2430.00 Investments: Cost Method) is in the parent company's file. The investment is carried at the lower of acquisition cost or market value.