If the fair value of the subsidiary's identifiable net assets exceeds both the book value and the value implied by the purchase price, the workpaper entry to eliminate the investment account:
A) debits Excess of Fair Value over Implied Value.
B) debits Difference Between Implied and Fair Value.
C) debits Difference Between Implied and Book Value.
D) credits Difference Between Implied and Book Value.

Question

Quizplus · Accepted Answer

When the fair value of the subsidiary's identifiable net assets exceeds both the book value and the value implied by the purchase price, the workpaper entry to eliminate the investment account involves debiting the Difference Between Implied and Book Value. This adjustment is necessary to align the book value with the fair value as recognized in the acquisition.

If the Fair Value of the Subsidiary's Identifiable Net Assets