How are the investment and the non-controlling interest values accounted for in the purchase method? Note: There are 2 correct answers to this question.

The correct answer is A. There can be non-controlling interest values. B. The investment is adjusted. In the purchase method, there can be non-controlling interest values representing the portion of the subsidiary not owned by the parent company. The investment is adjusted to reflect the fair value of the acquired subsidiary's net assets.

Consolidation of Investments

Question

Options

AThere can be non-controlling interest values.
BThe investment is adjusted.
CThere cannot be any non-controlling interest values.
DThe Investment is eliminated.

How the community answered

(51 responses)

A
84% (43)
C
6% (3)
D
10% (5)

Explanation

In the purchase method, there can be non-controlling interest values representing the portion of the subsidiary not owned by the parent company. The investment is adjusted to reflect the fair value of the acquired subsidiary's net assets.

Topics

#purchase method#non-controlling interest#investment elimination#consolidation of investments

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