For a wholly-owned subsidiary or a holding subsidiary holding more than 50% shares, can the investment income of the parent company be counted as operating income?

For wholly-owned subsidiaries or holding subsidiaries holding more than 50% shares, the investment income of the parent company cannot be counted as operating income. Investment income can only be included in the investment income account, not in the operating income.

Main accounting treatment of investment income

(1) If the long-term equity investment is accounted by the cost method, it shall be deemed as recovering the investment cost. An enterprise shall debit "bank deposit" and other subjects according to the part of the cash dividends or profits announced by the investee that belongs to the enterprise, and according to the calculated share of the net profit realized or adjusted by the investee, and credit this subject according to the cash dividends or profits that have not yet been received.

(2) Long-term equity investments accounted for by the equity method shall be accounted for by the difference. When selling the long-term equity investment accounted by equity method, there should be no balance after the account is carried forward. When the investee suffers losses, it shall transfer the balance of this account to the account of "profit this year" and debit the account of "long-term equity investment-profit and loss adjustment".

(3) When selling long-term equity investment, if there is still a balance after making up the losses, the unconfirmed investment losses should be made up first, and the amount originally recorded in the subject of "capital reserve-other capital reserve" should be carried forward according to the proportion of the investment cost of disposing long-term equity investment.