Hello,
As I was looking going through Chevron's 2011 Annual Report(URL: chevron.com/annualreport/2011/documents/pdf/Chevron2011AnnualReport.pdf), I found that there is a discrepancy between "Equity in Earnings" or "Income from Equity Affiliates" on the income statement and a YOY increase in "Investments and Advances" on the balance sheet.
----------------------------------------------------Exhibit---------------------------------------------------------
From Chevron's 2011 Annual Report Under Note 12 to Cons. Fin. Statements
Investments and Advances Equity in Earnings
At December 31 Year ended December 31
2011 2010 2011 2010 2009
Total equity method $ 22,150 $ 20,816 $ 7,363 $ 5,637 $ 3,316
Other at or below cost 718 704
Total investments and
advances $ 22,868 $ 21,520
-----------------------------------------------------Exhibit--------------------------------------------------------
Going by the equity method, investments and advances on the investor's(in this case, Chevron's) balance sheet should increase by the amount of income from equity affiliates to account for the investor's proportional share of affiliates' earnings.
Now however, when you look at the actual numbers, the total equity method amount increased from $20,186 in 2010 to $22,150 in 2011 which yielded a $1,334 increase and not $7,363 or equity in earnings for 2011. Hence, there is $6,029 missing from the total equity method amount increase between 2011 and 2010.
Will you please explain to me on the discrepancy in the amount of increase for total equity method arising from income from equity affiliates?
Thank you.
As I was looking going through Chevron's 2011 Annual Report(URL: chevron.com/annualreport/2011/documents/pdf/Chevron2011AnnualReport.pdf), I found that there is a discrepancy between "Equity in Earnings" or "Income from Equity Affiliates" on the income statement and a YOY increase in "Investments and Advances" on the balance sheet.
----------------------------------------------------Exhibit---------------------------------------------------------
From Chevron's 2011 Annual Report Under Note 12 to Cons. Fin. Statements
Investments and Advances Equity in Earnings
At December 31 Year ended December 31
2011 2010 2011 2010 2009
Total equity method $ 22,150 $ 20,816 $ 7,363 $ 5,637 $ 3,316
Other at or below cost 718 704
Total investments and
advances $ 22,868 $ 21,520
-----------------------------------------------------Exhibit--------------------------------------------------------
Going by the equity method, investments and advances on the investor's(in this case, Chevron's) balance sheet should increase by the amount of income from equity affiliates to account for the investor's proportional share of affiliates' earnings.
Now however, when you look at the actual numbers, the total equity method amount increased from $20,186 in 2010 to $22,150 in 2011 which yielded a $1,334 increase and not $7,363 or equity in earnings for 2011. Hence, there is $6,029 missing from the total equity method amount increase between 2011 and 2010.
Will you please explain to me on the discrepancy in the amount of increase for total equity method arising from income from equity affiliates?
Thank you.