When a company is acquired and becomes a subsidiary of another company, the books of the subsidiary are unaffected on the date of the acquisition.

Question

Quizplus · Accepted Answer

The books of the subsidiary are not affected on the date of the acquisition because the subsidiary remains a separate legal entity. The parent company will record the acquisition as an investment, and the subsidiary will continue to operate as a separate company.

When a Company Is Acquired and Becomes a Subsidiary of Another