When consolidated financial statement are prepared,the parent company uses the equity method and reports the investment accounts for the subsidiaries on the balance sheet.

Question

Quizplus · Accepted Answer

When consolidated financial statements are prepared, the parent company eliminates the investment accounts for the subsidiaries and reports only the net assets of the subsidiaries on the balance sheet. The equity method is used only for separate financial statements of the parent company where it reports the investment accounts of its subsidiaries.

When Consolidated Financial Statement Are Prepared,the Parent Company Uses the Equity