The use of proportionate or pro rata consolidation generally has not been acceptable in the United States. Normally, a significant investment in the common stock of another company must be either fully consolidated or reported using the equity method.
Required
a. What method does Amerada Hess use to account for its investments in affiliates and joint ventures?
b. What method does EnCana Corporation use to account for its investments in jointly controlled ventures? In what country is EnCana based? Does this make a difference?
c. Should the method used to account for investments in affiliates be different depending on whether the affiliate is a corporation or an unincorporated partnership? Explain.