_____ Which of the following is the prescribed manner of reporting for the earnings and losses of foreign subsidiaries?
A) The subsidiary must be consolidated unless control is lacking or control is expected to be temporary.
B) The subsidiary cannot be consolidated and the investment therein is to be reported under the equity method of accounting.
C) The subsidiary cannot be consolidated and the investment therein is to be reported under the cost method of accounting.
D) The parent has the option of consolidating the subsidiary or presenting supplemental disclosures in the notes to the financial statements.
E) None of the above.

Question

Quizplus · Accepted Answer

The subsidiary must be consolidated unless control is lacking or control is expected to be temporary. This is the general rule for the reporting of earnings and losses of foreign subsidiaries in accordance with U.S. GAAP and IFRS. Control is the key factor in determining whether consolidation is required.

_____ Which of the Following Is the Prescribed Manner of Reporting