The standards as they relate to the accounting for investments, differ under PE GAAP and IFRS.Which of the following best describes the differences relative to the reporting for investments in subsidiaries?

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Under IFRS, subsidiaries must be consolidated into the financial statements of the parent company. This means that the assets, liabilities, revenues, and expenses of the subsidiary are combined with those of the parent company. Under PE GAAP, consolidation is allowed but not required, and companies have the option to use equity method accounting or cost method accounting instead.

The Standards as They Relate to the Accounting for Investments