Modified Equity Method

A method of accounting for the consolidation of the financial results of a Government Business Enterprise (GBE) within the Government Reporting Entity’s (GRE) consolidated financial statements. Under the modified equity method, the equity method of accounting is modified only to the extent that the GBE's accounting principles are not adjusted to conform with those of the GRE. Thus, the GRE aggregates a GBE's net assets and net income by adjusting the investment shown in the GRE's consolidated statement of financial position and by presenting the net income as a separate item on the GRE's consolidated statement of operations.

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