If a write-down has been made to the parent's investment under the cost method, the investment account can be written back up, but only to the original cost amount, if the subsidiary later becomes profitable.

Question

Quizplus · Accepted Answer

Under the cost method, once a write-down has been made to an investment, it cannot be written back up in the future, even if the subsidiary becomes profitable. The write-down is considered permanent.

If a Write-Down Has Been Made to the Parent's Investment