The SEC requires the use of push-down accounting in some specific situations.Push-down accounting results in:
A)goodwill be recorded in the parent company separate accounts.
B)eliminating subsidiary retained earnings and paid-in capital in excess of par.
C)reflecting fair values on the subsidiary's separate accounts.
D)changing the consolidation worksheet procedure because no adjustment is necessary to eliminate the investment in subsidiary account.

Question

The SEC requires the use of push-down accounting in some specific situations.Push-down accounting results in:
A)​goodwill be recorded in the parent company separate accounts.
B)​eliminating subsidiary retained earnings and paid-in capital in excess of par.
C)​reflecting fair values on the subsidiary's separate accounts.
D)​changing the consolidation worksheet procedure because no adjustment is necessary to eliminate the investment in subsidiary account.

Quizplus · Accepted Answer

Push-down accounting requires the fair values of the subsidiary's assets and liabilities to be recorded in its separate accounts. This can result in a higher or lower carrying value of the assets and liabilities on the subsidiary's books.

Note: While A, B, and D may be true in some cases, they are not the primary result or purpose of push-down accounting.

The SEC Requires the Use of Push-Down Accounting in Some