As part of the consolidation process for a partially-held foreign subsidiary, the elimination entry to distribute the excess of cost over book value will include a credit to Cumulative Translation Adjustment-Parent

Question

Quizplus · Accepted Answer

The elimination entry to distribute the excess of cost over book value in a partially-held foreign subsidiary includes a credit to Cumulative Translation Adjustment-Parent, which represents the unrealized gain or loss from changes in exchange rates on the translation of net assets of the subsidiary. The credit amount is based on the Parent's portion of the excess attributable to identifiable net assets times the difference between historical and current exchange rates, as the Parent only consolidates its share of the subsidiary. Thus, choice C is the best answer.

As Part of the Consolidation Process for a Partially-Held Foreign