Economics Finance

Equity method accounting is used when an investing company owns stocks of another affiliate company. There are several different ways of accounting for this ownership, but this method is perhaps the most popular.

Equity method accounting factors in the increase or decease in profits of the invested company. These differences are usually unrealized and not actually obtained by the investing company. The increase or decease is, of course, calculated on the percentage of stocks owned and does not account for dividends paid. For example, if an investor owns 100 shares of an affiliate’s stock. And if that stock increases 10%, only those 100 shares will reflect the 10% increase. The investing company will then record that increase as profit on their ledger.

Before going further, it is important to note that if a parent company owns over 50% of a subsidiary company, equity method accounting is not allowed. Consolidated companies are required to combine the financial figures into one statement for the group of entities. Continue reading ‘Equity Method Accounting Makes a Big Difference’ »

On October 1, the latest set of economic indicators seemed to be yet another sharp reminder that the US economy is in for a tough time over the years to come. With higher unemployment figures (although a slowing of job loss number is expected) and slowing manufacturing data, it should come as little or no surprise that people with debt trouble are going to look at bankruptcy as a way to escape the financial pressures facing them.

With many people right now still on pins and needles where their employment is concerned, Chapter 13 Bankruptcy might not be the great solution the American Government intended for it to be. While it may be nice to retain control and possession of important assets, the demands will continue to exist that any structured debt program under Chapter 13 be adhered to. Consequently, Chapter 7 bankruptcy filings should be expected to rise. Continue reading ‘Consider Whether Chapter 13 Bankruptcy is the Right Bankruptcy Option’ »

Bankruptcy and You – Understanding Credit Cards and Credit

Bankruptcy reform has made it more difficult than ever for people to file bankruptcy and enjoy being able to just get rid of credit card debt when they cannot afford it. However, this increase in difficulty when it comes to debt relief has led to credit card companies that are more aggressive than ever before. There is a great debate among the ABA, or American Bankers Association, about who is to blame for credit card debt and so many bankruptcy cases being filed. The lenders blame the consumers, while some blame the creditors for being too aggressive.

There will never be a definitive answer as to who is at fault. However, in order to make sure that consumers are safe no matter what creditors are doing, it is important to be informed. It IS harder than ever to file bankruptcy if a financial debacle is created. It isn’t hard to find debt relief services or companies that can help with debt settlement. It is the responsibility of the consumer, no matter how persuasive creditors might be, to avoid becoming another statistic of credit card debt and let debt take over their lives. Continue reading ‘Credit Cards and Bankruptcy’ »