Equity Method 2 - Fall 2018 Q24

jxtang97jxtang97
in CCIR.Instructions

Hi Graham,

I know the calculations in most of the past exams are now outdated, but I stumbled across the following and was wondering if this method of calculating Equity is still valid (since it looks very similar to Method 2 in the wiki)?

  • Equity(x) = Equity(x-1) + NI(x) + Change in AOCI

If not, why?

Comments

  • Staff-T1Staff-T1

    Its exactly method 2 - yeah it is still valid

  • jxtang97jxtang97

    For Method 2, we have:
    E(x) = E(x-1) + CI(x)
    CI(x) = NI(x) + OCI(x)

    does this mean OCI(x) = change in AOCI?

    is there any context that explains this?

  • Staff-T1Staff-T1

    That's right. OCI(X) = AOCI(X) - AOCI(X-1). The change in other comprehensive income is simply the difference between the accumulated other comprehensive income in one period vs the prior period

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