Under the parent company concept, the subsidiary's undervalued assets are revalued to 100% of their current values for consolidated reporting purposes.

Question

Quizplus · Accepted Answer

Under the parent company concept, the consolidation process focuses on the parent company's interest and does not revalue the subsidiary's assets to their current values for consolidated reporting purposes. The subsidiary's assets and liabilities are recorded at their historical cost as of the acquisition date.

Under the Parent Company Concept, the Subsidiary's Undervalued Assets Are