Issue Equity Theory and Entity Equity Theory for Consolidated Financial Statements

Abstract

　The motive for this paper was to apply the issue equity theory and the entity equity theory to the discussion for controlling interest and noncontrolling interest in the consolidated financial statements. Discussion for preferred shares has to be consistent with noncontrolling interests in the consolidated financial statements. If paid-in capital and retained earnings are presented separately for controlling interest, and if economic unit concept is adopted, paid-in capital and retained earnings for noncontrolling interest should be presented separately.