Which method must be used if ASC 810-10-65 prohibits full consolidation of a 70% owned subsidiary?
A)The cost method
B)The Liquidation value
C)Market value
D)Equity method

Question

Quizplus · Accepted Answer

When ASC 810-10-65 prohibits full consolidation of a 70% owned subsidiary, the equity method should be used. Under the equity method, the parent company recognizes its share of the subsidiary’s net income as well as any changes in the subsidiary’s equity on the parent company’s own books. This method is often used when the parent company has significant influence over the subsidiary but does not have control.

Which Method Must Be Used If ASC 810-10-65 Prohibits Full