What is the impact of cost method vs equity method on the EV of the parent?
Does one method make the valuation of the parent look better or not?
From my understanding, roughly speaking if less than 20%, it is considered an investment and uses cost method. If between 20%-50% ownership, it uses equity method. However, the caveat is more about influence. Does this mean that if less than 20% ownership, the parent can use equity method if they have influence? Conversely if has 30% ownership but no influence, can it use the cost method?
From a parent valuation standpoint, which method looks more favorable and why?
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