Subsidiary has property recorded at $60 000 using the cost method.Parent assesses the fair value of the property at $130 000.Group policy is to use the cost method.The correct consolidation data adjustment for the property is:
Dr.Property $\quad$$\quad$$\quad$$70 000
Cr.Asset revaluation reserve $\quad$$\quad$$70 000

Question

Quizplus · Accepted Answer

When consolidating financial statements, adjustments are made to ensure the group's financial statements are presented uniformly according to the group's accounting policies. However, if the group policy is to use the cost method, there would be no adjustment to revalue the subsidiary's property to fair value, as the cost method does not recognize revaluations to fair value in the financial statements.

Subsidiary Has Property Recorded at $60 000 Using the Cost \quad

Subsidiary Has Property Recorded at $60 000 Using the Cost $\quad$