equity method

Definition

An accounting method used to determine income derived from a company's investment in another company over which it exerts significant influence. Under the equity method, investment income equals a share of net income proportional to the size of the equity investment.

Use equity method in a sentence

You should always try and use the equity method if you are trying to break down all of the comings and goings of your funds.

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Last week, our company accountants were using the equity method in order to determine the profits from our newly acquired subsidiary.

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The equity method that Disney utilized in its parent company status to ABC gave it a lot of leeway to make new investments and expand its already global reach.

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