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[Music] [Music] hello and welcome to another tutorial video were going to cover the equity method of accounting otherwise known as equity investments for associate companies in this lesson this topic is all about how minority stakes and other companies work on the financial statements the accounting treatment is slightly confusing and weve gotten a number of questions about this over the years the typical question we get goes like this can you explain how the accounting for equity investments for associate companies works where do net income and dividends go what happens if a company changes its ownership percentage what about unrealized gains and losses so im going to give you the short answer first along with the very basics that you need to know then well go into a more complex demonstration with a full three statement financial model in excel and ill show you what happens with the net income and dividends and also what happens when a company changes its ownership percentage by
