The question asks how chaning the accounting method of a SPE from equity method to consolidation method is going to affect the Return on Equity ratio.
I thought Return on Equity stays the same under equity method/consolidation/prop consolidation?!
The answers says the ratio will decrease as equity figure will increase.
I thought Return on Equity stays the same under equity method/consolidation/prop consolidation?!
The answers says the ratio will decrease as equity figure will increase.