Purchase method

1. While accounting using Purchase method for COI, how is intercompany dividend is eliminated?
Is it part of level 20 elimination of intercompany income vs Expenses?
2. I beleive while accounting by Equity method.. there is no need to eliminate the intercompany devidend receipt at all. is it correct?

Hi Gokul,
Q1. No, it's not Revenue - Expense elimination.
For purchase method there are eliminations in all 3 main consolidated reports:
B/S: A/P vs. A/R
B/S + P&L: Dividends paid (in equity) vs. Income in form of dividends in P&L
Cash flow: Non-cash adjustments to ANI and dividends distribution.
Q2. That's correct. In case of associated companies the parent company takes its portion of the RE and places it into investment and its own RE. Not to be eliminated.

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    Step 3.
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    Hello Anton,
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