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March 18, 2026The Accounting Review

The Allocation of Combined Net Income in Reciprocal Affiliations.

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Authors

HBHarry ButtimerCollege of Alameda

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Implication

Accounting analysis reveals methods for improving income distribution in reciprocal affiliations, suggesting better calculations.

Key Points

  • The research aims to clarify the limitations of traditional methods for allocating combined net income in reciprocal affiliations.
  • Analyzed the allocation challenges in parent-subsidiary relationships.
  • Compared two-step and one-step processes for income calculation.
  • Used an example involving two companies with interownership.
  • Identified difficulties in the current algebraic method for net income allocation.
  • Proposed a one-step process that simplifies calculations.
  • Demonstrated the method using net income figures of $60,000 and $20,000 for two companies.

Cite This Study

Harry Buttimer (1961) studied this question.

synapsesocial.com/papers/69ba429c4e9516ffd37a302ehttps://doi.org/10.2308/tar-7097700
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1Reciprocal or Mutual Holdings: Allocating Earnings and Selecting the Accounting Method.1973
  2. 2The Treasury Stock Method and Conventional Method in Reciprocal Stockholdings - An Amalgamation: A Comment.1975
  3. 3The Treasury Stock Method and Conventional Method in Reciprocal Stockholdings -- An Amalgamation.1974
  4. 4The Treasury Stock Method and Conventional Method in Reciprocal Stockholdings - An Amalgamation: A Reply.1975
  5. 5Equity Accounting for Reciprocal Stockholdings.1988 · 1 citations