Under "push-down" accounting,a subsidiary's assets and liabilities are revalued using:
A)fair market values.
B)Lower of Cost and Market principles.
C)the parent's acquisition cost.
D)the net asset values (NAV).

Question

Quizplus · Accepted Answer

Under push-down accounting, the subsidiary's assets and liabilities are revalued using the parent's acquisition cost. Push-down accounting is used when the parent company acquires a controlling interest in the subsidiary and wants to reflect the economic reality of the acquisition in the financial statements. By revaluing the assets and liabilities at the acquisition cost, the parent company can show a more accurate picture of the subsidiary's financial position.

Under "Push-Down" Accounting,a Subsidiary's Assets and Liabilities Are Revalued Using