A parent and its subsidiary adopt different bases for measuring property plant and equipment assets.Upon consolidation,the financial statements must reflect:
A) the accounting policy of the group.
B) the accounting policy of the subsidiary.
C) either the accounting policy of the parent or the subsidiary.
D) none of the above.

Question

Quizplus · Accepted Answer

When a parent and subsidiary have different accounting policies for measuring property, plant, and equipment, the financial statements of the group must reflect the accounting policy of the group, not that of the parent or the subsidiary. This is because consolidation requires the financial statements to show the true and fair view of the group's financial position, and consistency in accounting policies is essential for achieving this objective. Therefore, choice A, the accounting policy of the group, is the correct answer.

A Parent and Its Subsidiary Adopt Different Bases for Measuring