1. User's Guide
  2. Managing Equity Pickup
  3. Examples of Equity Pickup Adjustments
  4. Example 1: Direct Ownership

Example 1: Direct Ownership

  • H owns 80% of A.

  • Investment in A at historical cost: 100

  • Actual Equity of A: 1000

  • Adjustment amount in H related to investment in A =

    (80% * 1000) = 800 – 100 = 700

The EPU adjustment impacts both assets and equity in the holding company.

Investments in A: 700 (Debit)

Equity: 700 (Credit)


This graphic displays an example of a direct ownership balance sheet.