Equity Pickup Module
Equity Pickup is a method of re-evaluating the investments owned by a holding company, allowing the parent to realize changes in equity. This results in the holding company’s balance sheet showing the current value of the corresponding share in the equity of the subsidiary. Investments are normally shown at historical or acquisition cost. But an invested company has a value that can vary based on the profit and loss they are incurring. The Equity Pickup adjustment offsets the historical cost in local currency, showing the actual value of the equity owned. The Equity Pickup adjustment is not unlike the Equity method described in the “Ownership Module” section of this chapter.
You can calculate the adjustment by simply taking ...
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