The equity method of consolidation can be performed according to the book value method or the proportion-of-equity method. In the equity method, it is not necessary to transfer the entire individual financial statements of the associated company into the totals table. If data is nevertheless entered, it is not considered in the data selection for standard reports. The consolidation exclusively uses the information of the additional financial reporting tables. The equity and the hidden reserves/fair value adjustments are needed for the first consolidation; and the changes in equity for the subsequent consolidations.

During first consolidation, the system calculates a differential, as in the purchase method, taking hidden reserves/fair value adjustments into consideration. How the differential is disclosed depends on which equity variant is chosen:

• In the book value method, an existing goodwill is not stated separately on the balance sheet but is part of the investment book value.

• In the proportion-of-equity method, goodwill is disclosed as a separate item on the balance sheet, which may include goodwill from other consolidation methods. Negative goodwill is usually displayed in a statistical item, as in the book value method. However, it may by possible to state it on the balance sheet, in which case an offsetting entry is posted to the investment item.

For updating the investment book value during subsequent consolidations, special selected items must be set up in the system.