In this scenario, you use This scenario describes a Sale of Interest in Investee type transaction with the equity method of accountingwhen you use the Equity Method (EMA) accounting method. When you use the equity method of accounting for a position, you can hold positions that use the Equity Method (EMA) of accounting method as well as positions that use the STAR accounting method of accounting. These scenarios describe the Equity Method (EMA) of accounting.For these scenarios .
For this scenario, the Entity (EMAENT) has two bases:
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Any other bases that use the generic STAR method of accounting process the Open, Close, and Conversion transactions as they normally do in Eagle Accounting, while all of the Adjustment transactions are not available for generic STAR accounting bases.For more information about entering the transaction, see Sell Shares with the Equity Method of Accounting.
STAT Treatment
LOT1 has a current cost of $5,000, LOT2 has a current cost of $4,000, for a total position cost of $9,000. The cash booked on the Sale of Interest transaction is $7,000, closing 75% of the position.
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Account | Account | Debit | Credit |
|---|---|---|---|
1010000100 | COST OF INVESTMENTS | 0.00 | 6,750.00 |
1002000100 | INVESTMENT RECEIVABLE | 10,750.00 | 0.00 |
1011000101 | UNREALIZED APPRECIATION OF INVESTMENTS | 0.00 | 2,250.00 |
1011000103 | UNREALIZED APPRECIATION OF UNDISTRIBUTED INCOME | 0.00 | 3,750.00 |
3006000101 | REALIZED GAIN ON INVESTMENTS | 0.00 | 4,000.00 |
3003000331 | NET UNREALIZED GAIN ALLOCATED TO CAPITAL | 2,250.00 | 0.00 |
3003000401 | UNREALIZED INCOME/LOSS | 3,750.00 | 0.00 |
Other Treatment
LOT1 has a current cost of $8,000, LOT2 has a current cost of $6,000, for a total position cost of $14,000. Note that for the Other treatment, any undistributed income is booked as cost, hence the different starting point from the transaction above. The cash booked on the sale of interest is $10,750, closing 75% of the position.
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