Investopedia explains 'Proportional Consolidation'
The issue of accounting for joint ventures has been a matter of ongoing discussion in the movement to resolve significant differences between IFRS and U.S. GAAP. Proponents of proportional consolidation argue that this method provides more detailed information, since it breaks out the performance of the joint venture interest into its component parts. The equity method is favored by others, who feel that it is a simpler and more straightforward approach of accounting for outside investments.
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