>
> Minority Interest is under Net Income. (If I am
> not wrong).
> If SE and NI end being the same in both the cases
> then is there Minority Interest or some equivalent
> of Minority Interest (may be Equity - Net) in both
> the cases (significant influence and controlling
> interest).
>
There are adjustments to make under both methods on the income statement. For Equity method, the Net Income of the parent company will be the same other than an additional line item in their income statement called “Equity in income of Investee” or, like in the CFAI mock exam, they call this “Equity Income”
For Consolidation Method, there is no “Equity in income of…” because you have consolidated the two companies revenues, expenses, and other assets and liabs. However, you cannot completely consolidate the both since the parent will not own 100% of the investee. Therefore, you have a “Minority Interest” account that is a contra account (deducted from) the Income Statement to arrive at net income.
So for Equity Method: remember the Income Statment holds the “Equity in income of..” line (which adds to income)
for Consolidation Method: the Income Statement reflects a “Minority Interest” line (which subtracts from the income stmnt)
On the B/S, Equity is a one line item on current asset. Initially recorded at cost and increased by the Pro Rata share of the earnings. Dividends are NOT recognized in the income statment and instead act as a return of principal reducing your noncurrent investment item on the B/S.