A subsidiary's realized income is its reported net income adjusted for intercompany profits from upstream sales.

Question

Quizplus · Accepted Answer

A subsidiary's realized income takes into account its reported net income but also adjusts for any profits earned from sales made to the subsidiary by its parent company (known as upstream sales). This adjustment is necessary to accurately reflect the subsidiary's profitability independent of any financial support from its parent company.

A Subsidiary's Realized Income Is Its Reported Net Income Adjusted