Which of the following statements is false regarding the assignment of a gain or loss when an affiliate's debt instrument is acquired on the open market?
A) Subsidiary net income is not affected by a gain on the debt transaction.
B) Subsidiary net income is not affected by a loss on the debt transaction.
C) Parent Company net income is not affected by a gain on the debt transaction.
D) Parent Company net income is not affected by a loss on the debt transaction.
E) Consolidated net income is not affected by a gain or loss on the debt transaction.

Question

Quizplus · Accepted Answer

Consolidated net income is affected by a gain or loss on the debt transaction because it reflects the overall financial performance of the entire group, including the effects of such transactions.

Which of the Following Statements Is False Regarding the Assignment