When the non-controlling interest's share of the subsidiary's goodwill cannot be reliably determined, the method used to prepare consolidated financial statements is:
A) the fair value enterprise method.
B) The proportionate consolidation method.
C) the parent company method.
D) the identifiable net assets method.

Question

Quizplus · Accepted Answer

The identifiable net assets method is used when the non-controlling interest's share of the subsidiary's goodwill cannot be reliably determined. This method involves calculating the subsidiary's net assets (assets minus liabilities) and subtracting any non-controlling interest in those net assets. The remaining amount is recorded as goodwill on the parent company's consolidated balance sheet.

When the Non-Controlling Interest's Share of the Subsidiary's Goodwill Cannot