USA Minority Interest Accounting


AGH the CPA

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Yes I know a basic question but Google isnt helping - also happy to go look at links if anyone has one that shows the accounting from the investee's perspective rather than the investor...

Company A invests 100k in Company B for 45% interest. How does Company B account for this on their books?

DR cash 100k
CR ??

Not a liability account because its not a loan... some type of equity account? help?
 
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Werner Reisacher

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Under what type of legal entity is Company B registered, and what does the "investment/purchase agreement" that documents the financial transaction say about the type of investment? (purchase of shares?)
 

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