When consolidating a subsidiary under the equity method, which of the following statements is true with regard to the subsidiary subsequent to the year of acquisition?
A) All net assets are revalued to fair value and must be amortized over their useful lives.
B) Only net assets that had excess fair value over book value when acquired by the parent must be amortized over their useful lives.
C) All depreciable net assets are revalued to fair value at date of acquisition and must be amortized over their useful lives.
D) Only depreciable net assets that have excess fair value over book value must be amortized over their useful lives.
E) Only assets that have excess fair value over book value must be amortized over their useful lives.

Question

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The Answer of When consolidating a subsidiary under the equity method, which of the following statements is true with regard to the subsidiary subsequent to the year of acquisition?
A) All net assets are revalued to fair value and must be amortized over their useful lives.
B) Only net assets that had excess fair value over book value when acquired by the parent must be amortized over their useful lives.
C) All depreciable net assets are revalued to fair value at date of acquisition and must be amortized over their useful lives.
D) Only depreciable net assets that have excess fair value over book value must be amortized over their useful lives.
E) Only assets that have excess fair value over book value must be amortized over their useful lives.

When Consolidating a Subsidiary Under the Equity Method, Which of the Following