Consolidated Theories PushDown Accounting and Corporate Joint Ventures

Learning Objective 1 Compare and contrast the elements of consolidation approaches under contemporary theory,

Comparison of Consolidation Theories Parent company theory adopts the viewpoint of parent company stockholders.

Comparison of Consolidation Theories Contemporary theory identifies the primary users of consolidated financial statements

Comparison of Consolidation Theories Following areas in which the three theories have differences: Basic

Comparison of Consolidation Theories Equity of minority interests Consolidation of subsidiary net assets Unrealized

Illustration: Consolidation Under Parent Company and Entity Theories Pedrich acquires a 90% interest in

Illustration: Consolidation Under Parent Company and Entity Theories Pedrich 12/31/02 (000) Cash Net receivables

Illustration: Consolidation Under Parent Company and Entity Theories Sandy 12/31/02 (000) Cash Net receivables

Entity Theory Fair Book Value – Value Accounts receivable, net $35 $30 Inventories 50

Parent Company Theory Fair Book × Excess – Value 90% = Fair Value Accounts

Consolidation Working Papers January 1, 2003 (Parent Company) Account Title Pedrich Assets Cash $

Consolidation Working Papers January 1, 2003 (Parent Company) Adjustments and Eliminations Dr. Cr. Account

Consolidation Working Papers January 1, 2003 (Entity Theory) Account Title Pedrich Assets Cash $

Consolidation Working Papers January 1, 2003 (Entity Theory) Adjustments and Eliminations Dr. Cr. Account

Consolidation After Acquisition Sandy’s net income and dividends for 2003 are $35, 000 and

Consolidation After Acquisition: Equity Method Share of Sandy’s net income ($35, 000 × 90%)

Consolidation Working Papers December 31, 2003 (Parent Company) Income Statement Sales Income from Sandy

Consolidation Working Papers December 31, 2003 (Parent Company) Balance Sheet Cash Receivables, net Inventories

Consolidation Working Papers December 31, 2003 (Parent Company) Balance Sheet Liabilities Capital stock Retained

Consolidation Working Papers December 31, 2003 (Entity Theory) Income Statement Sales Income from Sandy

Consolidation Working Papers December 31, 2003 (Entity Theory) Balance Sheet Cash Receivables, net Inventories

Consolidation Working Papers December 31, 2003 (Entity Theory) Balance Sheet Liabilities Capital stock Retained

Consolidated Income Statements at December 31, 2003 Parent Co. (000) Theory Sales $ 800.

Consolidated Balance Sheets at December 31, 2003 Parent Co. Assets Theory Cash $ 42.

Consolidated Balance Sheets at December 31, 2003 Liabilities Parent Co. and Equity Theory Liabilities

Learning Objective 2 Adjust subsidiary assets and liabilities to fair values using push-down accounting.

Push-Down Accounting In certain situations, the SEC requires that the fair values of the

Push-Down Accounting: Parent Company Theory Book Value Cash $ 5. 0 Accounts receivable, net

Push-Down Accounting: Parent Company Theory Liabilities Capital stock Retained earnings Push-down capital Book Value

Push-Down Accounting: Parent Company Theory Accounts Receivable Inventory Plant Assets Goodwill Retained Earnings Push-down

Push-Down Accounting: Entity Theory $198, 000 cost ÷ 90% = $220, 000 implied value

Push-Down Accounting: Entity Theory Book Value Cash $ 5. 0 Accounts receivable, net 30.

Push-Down Accounting: Entity Theory Liabilities Capital stock Retained earnings Push-down capital Book Value $

Push-Down Accounting: Entity Theory Accounts Receivable Inventory Plant Assets Goodwill Retained Earnings Push-down Capital

Consolidation Working Papers December 31, 2003 (Parent Company) Add: Net income Adjustments/ Consol. Pedrich

Learning Objective 3 Account for corporate and unincorporated joint ventures. © 2003 Prentice Hall

Nature of Joint Ventures A joint venture is a business entity that is owned,

Organizational Structures of Joint Ventures Corporate joint venture General partnership Limited partnership Undivided interest

Accounting for Investment Corporate joint venture Unincorporated joint ventures Equity method Proportionate consolidation ©

End of Chapter 11 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn

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Learning Objective 1 Compare and contrast the elements of consolidation approaches under contemporary theory, parent company theory, and entity theory. © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 2

Comparison of Consolidation Theories Parent company theory adopts the viewpoint of parent company stockholders. Entity theory focuses on the total consolidated entity. © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 3

Comparison of Consolidation Theories Contemporary theory identifies the primary users of consolidated financial statements as the stockholders and creditors of the parent company with the objective of reporting the operations as a single business entity. © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 4

Comparison of Consolidation Theories Following areas in which the three theories have differences: Basic purpose and users of consolidated financial statements Consolidated net income Minority interest expense © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 5

Comparison of Consolidation Theories Equity of minority interests Consolidation of subsidiary net assets Unrealized gains and losses Constructive gains and losses on debt retirement © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 6

Illustration: Consolidation Under Parent Company and Entity Theories Pedrich acquires a 90% interest in Sandy on January 1, 2003, for $198, 000. Sandy’s net book value was $120, 000 on this date. $198, 000 – ($120, 000 × 90%) = $90, 000 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 7

Illustration: Consolidation Under Parent Company and Entity Theories Pedrich 12/31/02 (000) Cash Net receivables Inventories Other current assets Plant assets, net Total assets Liabilities Capital stock, $10 par Retained earnings Total liabilities and stockholders’ equities Book Value $220 80 90 20 220 $630 $ 80 400 150 $630 Fair Value $220 80 100 20 300 $720 $ 80 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 8

Illustration: Consolidation Under Parent Company and Entity Theories Sandy 12/31/02 (000) Cash Net receivables Inventories Other current assets Plant assets, net Total assets Liabilities Capital stock, $10 par Retained earnings Total liabilities and stockholders’ equities Book Value $ 5 30 40 10 60 $145 $ 25 100 20 $145 Fair Value $ 5 35 50 10 80 $180 $ 25 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 9

Entity Theory Fair Book Value – Value Accounts receivable, net $35 $30 Inventories 50 40 Plant assets, net 80 60 Remainder to goodwill Total implied value over book value = Excess Fair Value $ 5 10 20 65 $100 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 10

Parent Company Theory Fair Book × Excess – Value 90% = Fair Value Accounts receivable, net $35 $30 $ 4. 5 Inventories 50 40 9. 0 Plant assets, net 80 60 18. 0 Remainder to goodwill 58. 5 Total implied value over book value $90. 0 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 11

Consolidation Working Papers January 1, 2003 (Parent Company) Account Title Pedrich Assets Cash $ 22 Receivables, net 80 Inventories 90 Other current assets 20 Plant assets, net 220 Investment in Sandy 198 Goodwill Unamortized excess Sandy Total assets $145 $630 $ 5 30 40 10 60 Adjustments and Eliminations Dr. Cr. b b 4. 5 9 b 18 b a 58. 5 90 a 198 b 90 Consolidated Balance Sheet $ 27 114. 5 139 30 298 58. 5 $667 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 12

Consolidation Working Papers January 1, 2003 (Parent Company) Adjustments and Eliminations Dr. Cr. Account Title Pedrich Sandy Liabilities and Equity Liabilities $ 80 $ 25 Capital stock 400 100 a Retained earnings 150 20 a Minority interest Total equities $105 400 150 100 20 a $630 $145 Consolidated Balance Sheet 12 12 $667 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 13

Consolidation Working Papers January 1, 2003 (Entity Theory) Account Title Pedrich Assets Cash $ 22 Receivables, net 80 Inventories 90 Other current assets 20 Plant assets, net 220 Investment in Sandy 198 Goodwill Unamortized excess Sandy Total assets $145 $630 $ 5 30 40 10 60 Adjustments and Eliminations Dr. Cr. b b 5 10 b 20 b 65 a 100 a 198 b 100 Consolidated Balance Sheet $ 27 115 140 30 300 65 $677 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 14

Consolidation Working Papers January 1, 2003 (Entity Theory) Adjustments and Eliminations Dr. Cr. Account Title Pedrich Sandy Liabilities and Equity Liabilities $ 80 $ 25 Capital stock 400 100 a Retained earnings 150 20 a Minority interest Total equities $105 400 150 100 20 a $630 $145 Consolidated Balance Sheet 22 22 $677 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 15

Consolidation After Acquisition Sandy’s net income and dividends for 2003 are $35, 000 and $10, 000, respectively. The excess of fair value over book value of Sandy’s accounts receivable and inventories at January 1, 2003, is realized during 2003. Sandy’s plant assets are being depreciated at a 5% annual rate. © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 16

Consolidation After Acquisition: Equity Method Share of Sandy’s net income ($35, 000 × 90%) Realization of excess allocated to: Receivables ($5, 000 × 90%) Inventories ($10, 000 × 90%) Depreciation ($20, 000 × 90%) ÷ 20 years Income from Sandy for 2003 $31, 500 – 4, 500 – 9, 000 – 900 $17, 100 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 17

Consolidation Working Papers December 31, 2003 (Parent Company) Income Statement Sales Income from Sandy Cost of sales Operating expenses Minority interest Net income Retained earnings Dividends Add: Net income Retained earnings December 31, 2003 Adjustments/ Consol. Pedrich Sandy Eliminations idated $600 $200 $800 17. 1 a 17. 1 (300) (120) c 9 (429) (211. 25) (45) c 4. 5 d. 9 (261. 65) e 3. 5 (3. 5) $105. 85 $ 35 $105. 85 $150 $20 b 20 $150 (80) (10) a 9 e 1 (80) 105. 85 35 105. 85 $175. 85 $ 45 $175. 85 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 18

Consolidation Working Papers December 31, 2003 (Parent Company) Balance Sheet Cash Receivables, net Inventories Other current assets Plant assets, net Investment in Sandy Adjustments/ Eliminations Pedrich Sandy $ 29. 75 $ 13 90 32 100 48 30 17 200 57 c 18 206. 1 Goodwill Unamortized excess Total assets c 58. 5 b 90 $655. 85 $167 d 9 a 8. 1 b 198 c 90 Consolidated $ 42. 75 122 148 47 274. 1 58. 5 $692. 35 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 19

Consolidation Working Papers December 31, 2003 (Parent Company) Balance Sheet Liabilities Capital stock Retained earnings Adjustments/ Eliminations Pedrich Sandy $ 80 $ 22 400 100 b 100 175. 85 45 Minority interest Total equities b 12 e 2. 5 $655. 85 $167 Consolidated $102 400 175. 85 14. 5 $692. 35 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 20

Consolidation Working Papers December 31, 2003 (Entity Theory) Income Statement Sales Income from Sandy Cost of sales Operating expenses Minority interest Net income Retained earnings Dividends Add: Net income Retained earnings December 31, 2003 Adjustments/ Consol. Pedrich Sandy Eliminations idated $600 $200 $800 17. 1 a 17. 1 (300) (120) c 10 (430) (211. 25) (45) c 5 d 1 (262. 25) e 1. 9 (1. 9) $105. 85 $ 35 $105. 85 $150 $20 b 20 $150 (80) (10) a 9 e 1 (80) 105. 85 35 105. 85 $175. 85 $ 45 $175. 85 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 21

Consolidation Working Papers December 31, 2003 (Entity Theory) Balance Sheet Cash Receivables, net Inventories Other current assets Plant assets, net Investment in Sandy Adjustments/ Eliminations Pedrich Sandy $ 29. 75 $ 13 90 32 100 48 30 17 200 57 c 20 206. 1 Goodwill Unamortized excess Total assets c 65 b 100 $655. 85 $167 d 1 a 8. 1 b 198 c 100 Consolidated $ 42. 75 122 148 47 276 65 $700. 75 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 22

Consolidation Working Papers December 31, 2003 (Entity Theory) Balance Sheet Liabilities Capital stock Retained earnings Adjustments/ Eliminations Pedrich Sandy $ 80 $ 22 400 100 b 100 175. 85 45 Minority interest Total equities b 22 e. 9 $655. 85 $167 Consolidated $102 400 175. 85 22. 9 $700. 75 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 23

Consolidated Income Statements at December 31, 2003 Parent Co. (000) Theory Sales $ 800. 00 Cost of sales – 429. 00 Operating expenses – 261. 65 Minority interest expense – 3. 50 Consolidated net income $ 105. 85 Distributions to: Minority stockholders Majority stockholders Total consolidated net income Minority interest expense Consolidated net income Entity Theory $ 800. 00 – 430. 00 – 262. 25 – $ 107. 75 Contemp. Theory $ 800. 00 – 429. 00 – 261. 65 – $ 1. 90 $ 105. 85 $ 109. 35 – 3. 50 $ 105. 85 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 24

Consolidated Balance Sheets at December 31, 2003 Parent Co. Assets Theory Cash $ 42. 75 Net A/R 122. 00 Inventories 148. 00 Other current assets 47. 00 Total current assets $359. 75 Plant assets, net 274. 10 Goodwill 58. 50 Total noncurrent assets $332. 60 Total assets $692. 35 Entity Theory $ 42. 75 122. 00 148. 00 47. 00 $359. 75 276. 00 65. 00 $341. 00 $700. 75 Contemp. Theory $ 42. 75 122. 00 148. 00 47. 00 $359. 75 274. 10 58. 50 $332. 60 $692. 35 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 25

Consolidated Balance Sheets at December 31, 2003 Liabilities Parent Co. and Equity Theory Liabilities $102. 00 Minority interest 14. 50 Total liabilities $116. 50 Capital stock 400. 00 Retained earnings 175. 85 Minority interest – Total stockholders’ equity $575. 85 Total equities $692. 35 Entity Contemp. Theory $102. 00 – – $102. 00 400. 00 175. 85 22. 90 14. 50 $598. 75 $590. 35 $700. 75 $692. 35 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 26

Learning Objective 2 Adjust subsidiary assets and liabilities to fair values using push-down accounting. © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 27

Push-Down Accounting In certain situations, the SEC requires that the fair values of the acquired subsidiary’s assets and liabilities, which represent the parent company’s cost basis, be recorded in the separate financial statements of the purchased subsidiary. © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 28

Push-Down Accounting: Parent Company Theory Book Value Cash $ 5. 0 Accounts receivable, net 30. 0 Inventory 40. 0 Other current assets 10. 0 Plant assets, net 60. 0 Goodwill – $145. 0 Push-Down Adjustment $ – 4. 5 9. 0 – 18. 0 58. 5 $90. 0 BV Value after P-D $ 5. 0 34. 5 49. 0 10. 0 78. 0 58. 5 $235. 0 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 29

Push-Down Accounting: Parent Company Theory Liabilities Capital stock Retained earnings Push-down capital Book Value $ 25. 0 100. 0 20. 0 – $145. 0 Push-Down Adjustment $ – – (20. 0) 110. 0 $ 90. 0 BV Value after P-D $ 25. 0 100. 0 – 110. 0 $235. 0 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 30

Push-Down Accounting: Parent Company Theory Accounts Receivable Inventory Plant Assets Goodwill Retained Earnings Push-down Capital 4, 500 9, 000 18, 000 58, 500 20, 000 110, 000 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 31

Push-Down Accounting: Entity Theory $198, 000 cost ÷ 90% = $220, 000 implied value $220, 000 – $120, 000 book value = $100, 000 excess © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 32

Push-Down Accounting: Entity Theory Book Value Cash $ 5. 0 Accounts receivable, net 30. 0 Inventory 40. 0 Other current assets 10. 0 Plant assets, net 60. 0 Goodwill – $145. 0 Push-Down Adjustment $ – 5. 0 10. 0 – 20. 0 65. 0 $100. 0 BV Value after P-D $ 5. 0 35. 0 50. 0 10. 0 80. 0 65. 0 $245. 0 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 33

Push-Down Accounting: Entity Theory Liabilities Capital stock Retained earnings Push-down capital Book Value $ 25. 0 100. 0 20. 0 – $145. 0 Push-Down Adjustment $ – – – 20. 0 120. 0 $100. 0 BV Value after P-D $ 25. 0 100. 0 – 120. 0 $245. 0 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 34

Push-Down Accounting: Entity Theory Accounts Receivable Inventory Plant Assets Goodwill Retained Earnings Push-down Capital 5, 000 10, 000 20, 000 65, 000 20, 000 120, 000 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 35

Consolidation Working Papers December 31, 2003 (Parent Company) Add: Net income Adjustments/ Consol. Pedrich Sandy Eliminations idated $600 $200 $800 17. 1 a 17. 1 (300) (129) (429) (211. 25) (50. 4) (261. 65) c 3. 5 (3. 5) $105. 85 $ 20. 6 $105. 85 $150 $ 0 $150 (80) (10) a 9 c 1 (80) 105. 85 20. 6 105. 85 Retained earnings December 31, 2003 $175. 85 Income Statement Sales Income from Sandy Cost of sales Operating expenses Minority interest Net income Retained earnings Dividends $ 10. 6 $175. 85 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 36

Consolidation Working Papers December 31, 2003 (Parent Company) Balance Sheet Cash Receivables, net Inventories Other current assets Plant assets, net Investment in Sandy Goodwill Total assets Pedrich Sandy $ 29. 75 $ 13 90 32 100 48 30 17 200 74. 1 206. 1 58. 5 $655. 85 $242. 6 Adjustments/ Eliminations a 8. 1 b 198 Consolidated $ 42. 75 122 148 47 274. 1 58. 5 $692. 35 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 37

Consolidation Working Papers December 31, 2003 (Parent Company) Balance Sheet Liabilities Capital stock Retained earnings Push-down capital, Sandy Adjustments/ Eliminations Pedrich Sandy $ 80 $ 22 400 100 b 100 175. 85 10. 6 110 Minority interest Total equities b 110 b 12 c 2. 5 $655. 85 $242. 6 Consolidated $102 400 175. 85 14. 5 $692. 35 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 38

Consolidation Working Papers December 31, 2003 (Entity Theory) Income Statement Sales Income from Sandy Cost of sales Operating expenses Minority interest Adjustments/ Consol. Pedrich Sandy Eliminations idated $600 $200 $800 17. 1 a 17. 1 (300) (130) (430) (211. 25) (51) (262. 25) c 1. 9 (1. 9) Net income Retained earnings Dividends $105. 85 $150 (80) $ 19 $ 0 (10) Add: Net income Retained earnings December 31, 2003 105. 85 19 $175. 85 $ 9 a 9 e 1 $105. 85 $150 (80) 105. 85 $175. 85 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 39

Consolidation Working Papers December 31, 2003 (Entity Theory) Balance Sheet Cash Receivables, net Inventories Other current assets Plant assets, net Investment in Sandy Pedrich Sandy $ 29. 75 $ 13 90 32 100 48 30 17 200 76 206. 1 Goodwill Total assets 65 $655. 85 $251 Adjustments/ Eliminations a 8. 1 b 198 Consolidated $ 42. 75 122 148 47 276 65 $700. 75 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 40

Consolidation Working Papers December 31, 2003 (Entity Theory) Balance Sheet Liabilities Capital stock Retained earnings Push-down capital, Sandy Adjustments/ Eliminations Pedrich Sandy $ 80 $ 22 400 100 b 100 175. 85 9 120 b 120 Minority interest Total equities Consolidated $102 400 175. 85 b 22 c. 9 $655. 85 $251 22. 9 $700. 75 © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 41

Nature of Joint Ventures A joint venture is a business entity that is owned, operated, and jointly controlled by a small group of investors (venturers) for their mutual benefit. Each venturer usually has the ability to exercise significant influence over the joint venture investee. © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 43

Organizational Structures of Joint Ventures Corporate joint venture General partnership Limited partnership Undivided interest © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 44

Accounting for Investment Corporate joint venture Unincorporated joint ventures Equity method Proportionate consolidation © 2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn 11 - 45