Which of the following is the primary justification for reporting the acquisition of a controlling interest on a consolidated basis?
A)The companies are legally and in economic substance separate.
B)The companies are legally and in economic substance one entity.
C)The companies are legally one entity but they are separate in economic substance.
D)The companies are legally separate but they are one entity in economic substance.

Question

Quizplus · Accepted Answer

The companies are legally separate because each of the entities is a legal entity in its own. But they are one entity in economic substance because the parent company controls the subsidiary company.

Which of the Following Is the Primary Justification for Reporting