Intra-entity receivables and payables for an 80%-owned subsidiary are eliminated to the extent of ownership (i.e.,80% of balance is eliminated).

Question

Quizplus · Accepted Answer

Intra-entity receivables and payables are fully eliminated in consolidation, regardless of the percentage of ownership, to present the financial statements as if the parent and subsidiary are a single economic entity.

Intra-Entity Receivables and Payables for an 80%-Owned Subsidiary Are Eliminated