Which of the following statements about the consolidation process is FALSE?
A)The consolidation process will involve replacing the investment account that is recorded in the books of the acquirer with the specific net assets acquired from the acquiree.
B)Consolidation is achieved by combining the financial statements of both the parent and its subsidiary.
C)The consolidated financial statements of a parent and its subsidiary include information about a subsidiary from the date the parent obtains physical possession of the subsidiary.
D)A subsidiary continues to be included in the parent's consolidated financial statements until the parent no longer controls that entity.

Question

Quizplus · Accepted Answer

The false statement is that the consolidated financial statements include information about a subsidiary from the date the parent obtains physical possession of the subsidiary. In reality, consolidation includes the subsidiary's information from the date the parent gains control over the subsidiary, which is not necessarily tied to physical possession.

Which of the Following Statements About the Consolidation Process Is