When a parent sells its subsidiary interest, a gain (loss) is recognized if the parent ?
$\begin{array}{l}
&\text { sells its } &\text{ sells part but } &\text{ sells part and }\
& \text { entire investment } &\text { retains control} &\text { loses control } \\end{array}$
A)$\begin{array}{l}&&&\text {Yes } &&&&& & \text { Yes } &&&&& \text { No } \\end{array}$
B)$\begin{array}{l}&&&\text {Yes } &&&&&& & \text { No } &&&& \text { Yes } \\end{array}$
C)$\begin{array}{l}&&&\text {No } &&&&&& & \text { No }&&&& & \text { No } \\end{array}$
D)$\begin{array}{l}&&&\text {No } &&&&&& & \text { No } &&&&& \text { Yes }
\end{array}$

Question

When a parent sells its subsidiary interest, a gain (loss) is recognized if the parent ?
$\begin{array}{l}
&\text { sells its  } &\text{ sells part but } &\text{  sells part and }\
& \text { entire investment } &\text { retains control} &\text { loses control } \\end{array}$
A)$\begin{array}{l}&&&\text {Yes } &&&&& & \text { Yes } &&&&& \text { No } \\end{array}$
B)$\begin{array}{l}&&&\text {Yes } &&&&&& & \text { No } &&&& \text { Yes } \\end{array}$
C)$\begin{array}{l}&&&\text {No } &&&&&& & \text { No }&&&& & \text { No } \\end{array}$
D)$\begin{array}{l}&&&\text {No } &&&&&& & \text { No } &&&&& \text { Yes }
\end{array}$

Quizplus · Accepted Answer

When selling a subsidiary interest, a gain or loss is recognized if the parent fully or partially sells its ownership. If the parent sells a part but still retains control, a gain or loss is recognized. If the parent fully sells its interest and loses control, a gain or loss is also recognized. Therefore, in option B, the parent recognizes a gain when it sells its entire investment and loses control, and recognizes no gain or loss when it sells only a part but retains control.

When a Parent Sells Its Subsidiary Interest, a Gain (Loss)