When a dividend is paid by a wholly-owned subsidiary out of pre-acquisition equity, the parent entity recognises:
This is explained more in Chapter 26.
A) a reduction in the investment in the subsidiary
B) a decrease in share capital
C) an increase in dividend income
D) a decrease in dividend revenue.

Question

Quizplus · Accepted Answer

The parent entity recognizes an increase in dividend income when a dividend is paid by a wholly-owned subsidiary out of pre-acquisition equity.

When a Dividend Is Paid by a Wholly-Owned Subsidiary Out