Whenever a parent ceases to have a controlling interest,the subsidiary should be deconsolidated and recorded as either an equity method or cost method investment.

Question

Quizplus · Accepted Answer

This statement is true. When a parent loses control over a subsidiary, the subsidiary must be deconsolidated from the parent's financial statements and accounted for as an equity method or cost method investment, depending on the level of influence the parent still holds over the subsidiary.

Whenever a Parent Ceases to Have a Controlling Interest,the Subsidiary