Under the equity method of accounting, the parent company debits the Intercompany Investment Income ledger account for the depreciation and amortization of differences between the current fair values and carrying amounts of a subsidiary's identifiable net assets on the date of the business combination.

Question

Quizplus · Accepted Answer

Under the equity method, the parent company recognizes its share of the subsidiary's net income or loss, which includes depreciation and amortization expenses.

Under the Equity Method of Accounting, the Parent Company Debits