Which of the following statements is false regarding multiple acquisitions of a subsidiary's existing common stock?
A) The parent recognizes a larger percent of subsidiary income.
B) A step acquisition resulting in control may result in a parent recognizing a gain on revaluation.
C) The book value of the subsidiary will increase.
D) The parent's percent ownership in subsidiary will increase.
E) Noncontrolling interest in subsidiary's net income will decrease.

Question

Quizplus · Accepted Answer

The book value of the subsidiary itself does not increase due to the parent's acquisition of its stock; rather, the parent's ownership percentage and control over the subsidiary may change.

Which of the Following Statements Is False Regarding Multiple Acquisitions