Summaries Relating To Exclusion of a Subsidiary
The following explanations are summaries the rules relating to exclusion of a subsidiary.
Reason 1
Serve long term restrictions hindering exercise of parent’s rights
Accounting Treatment
Balance sheet: equity method up to date of serve restrictions less amounts written off if permanent fall in value. Profit and loss account: dividends received only
Reason 2
Held exclusively for subsequent resale; has been consolidated
Accounting Treatment
Current asset at the lower of cost and net realizable value
Reason 3
Dissimilar activities
Accounting Treatment
Equity method
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