The parent company's investment account would include an element which is representative of

Question

Quizplus · Accepted Answer

The investment account includes the recorded cost of the investment as well as any adjustments made for the investor's share of the investee's earnings or losses. It also includes any goodwill recognized as a result of the acquisition. The element mentioned in option C relates to the difference between the fair value and book value of the investee's assets, which is not reflected in the investee's financial statements. This difference is recognized in the acquisition accounting and is included in the parent company's investment account.

The Parent Company's Investment Account Would Include an Element Which