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a. The subsidiary is a finance company.
b. The fiscal year-ends of the two companies are morethan three months apart.
c. The investee is in bankruptcy.
d. The two companies are in unrelated industries, such asmanufacturing and real estate.
C) Correct Answer.The Investee is in Bankcruptcy
dears thanks for answers
answer is : (c) A subsidiary should not be consolidated when
it is in bankruptcy. Consolidation of all majority-owned
subsidiaries is required regardless of the industry or business
of the subsidiary. A difference in fiscal periods of a parent
and a subsidiary does not of itself justify the exclusion of the
subsidiary from consolidation.
from Wiley CPA Study Guide
page Question7
ASC SFAS , Business Combination and Consolidation
agree with answer C >>>>>>>>>>>>>>>>>>>>>>>>>>>>
Till the subsidiary company that is investee becomes bankrupt.
answer C is the correct answer
thanks
d. The two companies are in unrelated industries, such as manufacturing and real estate.
The subsidiary is a finance company.
b. The fiscal year-ends of the two companies are morethan three months apart.
Not required to consolidate when the parent company's business operation are considerably different than that of it subsidiary.
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