In purchase accounting, an account called Investment in Subsidiary is never used.

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In purchase accounting, the account "Investment in Subsidiary" is not used on the consolidated balance sheet after consolidation adjustments. Instead, the individual assets and liabilities of the subsidiary are recorded at their fair values. However, before consolidation, on the separate financial statements of the parent company, an "Investment in Subsidiary" account is indeed used to represent the cost of the investment in the subsidiary.

In Purchase Accounting, an Account Called Investment in Subsidiary Is