If a subsidiary is not wholly owned by the parent, then intracorporate transfers of funds must be done on a fair-market basis.

Question

Quizplus · Accepted Answer

When a subsidiary is not wholly owned by the parent, the transactions between them must be done at arm's length and at market rates. This means that any transfer of funds or assets must be done on a fair-market basis to avoid any conflict of interest or financial advantage for either party. This is to ensure transparency in financial transactions and to prevent any possible abuse of power by the parent company over its subsidiaries.

If a Subsidiary Is Not Wholly Owned by the Parent