With an investment in a subsidiary,under Accounting Standards for Private Enterprise,the investment can be accounted for using consolidation,or the equity or cost method.

Question

Quizplus · Accepted Answer

Yes, this statement is true. According to Accounting Standards for Private Enterprise, an investment in a subsidiary can be accounted for using consolidation, equity, or cost method. The accounting method depends on the level of control an investor has over its subsidiary. Consolidation method is used when the investor has control over the subsidiary, whereas equity method is used when the investor has significant influence but not control. Cost method is used when the investor has no significant influence over the subsidiary.

With an Investment in a Subsidiary,under Accounting Standards for Private