If a revaluation of the subsidiary's assets is performed on consolidation, the subsidiary's assets are carried into the consolidated statement of financial position at:
A) net present value.
B) current replacement cost.
C) historical cost.
D) fair value.

Question

Quizplus · Accepted Answer

When a revaluation of the subsidiary's assets is performed on consolidation, the assets are carried into the consolidated statement of financial position at their fair value. Fair value is a measure of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This provides more relevant information about the value of the assets than historical cost, net present value, or current replacement cost.

If a Revaluation of the Subsidiary's Assets Is Performed on Consolidation