Where a Parent Entity with a Controlling Interest in a Subsidiary

question 43

True/False

Where a parent entity with a controlling interest in a subsidiary obtains additional equity,the carrying amounts of the controlling and non-controlling interests should be adjusted to reflect the changes in their relative interests in the subsidiary.Any difference between the fair value paid and the carrying amount of the additional interest acquired is recognised directly in profit or loss of the parent entity.

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Definitions:

Federal Insurance Company

An insurance provider that is regulated at the federal level, offering various types of insurance policies to protect against specific risks.

Timely

Refers to something done or occurring at a favorable or useful time; prompt.

Assent

Agreement or approval, typically given formally or officially, to a proposition or contract terms.

Offeree

The person or party to whom an offer is made, especially in contract law.