After consummating the purchase of 100% of the target company's common stock, the parent has the power to direct the newly acquired subsidiary to revalue its assets and liabilities to their current values based on the purchase price.

Question

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Upon acquiring 100% of a target company's common stock, the parent company gains control over the subsidiary, including the authority to direct financial and operational decisions such as revaluing assets and liabilities to reflect their current fair values based on the purchase price. This process is often part of purchase price allocation in accordance with accounting standards.

After Consummating the Purchase of 100% of the Target Company's