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The equity and proportional consolidation accounting methods are distinguished from one another by how a company's balance sheets and income statements report control in regard to joint ventures.The equity method and the proportional consolidation method are accounting treatments used when two companies are part of a joint venture.Using a memorandum joint venture account is another method to record the transactions in the books of the various parties.
Either the joint venture records journal entries in one consolidated book, or each party in the joint venture must keep separate books.
The type of joint venture and investing parties will determine the best method for keeping the accounting books.
Income earned on the investment must be recorded on the company's income statement.
First, the investment is recorded at cost, and then adjustments are made either up or down, depending on the venture's current value and the expenses associated with it.
After each party’s book is balanced, all balances should be reconciled by settling the differences between each party.
This method is not keeping a double book, but is reconciling the accounting records kept between joint venture parties in order to present a consolidated financial statement. She has worked in accounting for such corporations as First Data, MCI and Verizon.
Joint ventures are commonly used to invest in foreign and emerging market economies.
Joint ventures offer an expedient way for companies and individuals to pool knowledge, expertise and resources to accomplish a potentially lucrative deal while decreasing each party's exposure to risk.
A joint venture is a temporary partnership between two or more firms in any particular business venture for a short period of time. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS) determine acceptable accounting practices and reporting methods. GAAP, joint ventures usually must use the equity method of accounting.
Organizational structures of a joint venture are corporations, partnerships or undivided interests. Both base the need to consolidate an organization’s accounting books and reporting on the level of control of the parties in the joint venture. The exception for using the accounting equity method would be unincorporated industries that require proportionate consolidation.
The joint venture is its own enterprise, separated and set apart from any other business deals or interests in which the partnered individuals and companies are involved.Tags: Adult Dating, affair dating, sex dating