BetterCare Hospitals, Inc. operates a chain of hospitals throughout the United States. The company has been expanding by acquiring local hospitals. Its largest acquisition, that of Statewide Medical, was made under the pooling of interests method. BetterCare complies with U.S. GAAP.

BetterCare is currently forming a 50/50 joint venture with Supreme Healthcare, under which the companies will share control of several hospitals. Supreme Healthcare complies with IFRS and will comply with the preferred accounting methods for joint ventures.

Erik Ohalin is an equity analyst who covers both companies. He has estimated the joint venture’s financial information for 2009 in order to prepare his estimates of each company’s earnings and financial performance. This information is presented in Exhibit 15-12.

EXHIBIT 15-12 Selected Financial Statement Forecasts for Joint Venture ($ millions)

Year ending 31 December

2009

Revenue

$1,430

operating income

128

Net income

62

Total assets

1,500

Shareholders” equity

740

BetterCare recently announced it had formed a qualifying special purpose entity through which it can sell up to $100 million of its accounts receivable at any given time. Ohalin wants to estimate the impact this will have on BetterCare’s consolidated financial statements.

Based on Ohalin’s estimates, the amount of joint venture shareholders equity at 31 December 2009 included on the consolidated financial statements of each venturer will most likely be

a. higher for BetterCare.

b. higher for Supreme Healthcare.

c. the same for both BetterCare and Supreme Healthcare.