The Two Business Entities Involved in an Investment in Securities

question 106

Multiple Choice

The two business entities involved in an investment in securities with controlling influence,for which consolidated financial statements are prepared,are known as:

• A)Parent and Investor
• B)Subsidiary and Investee
• C)Consolidator and Parent
• D)Parent and Subsidiary
• E)Both are referred to as partners.

Learn how to prepare journal entries for the conversion of financial statements from IFRS to U.S. GAAP.

Grasp the components approach to depreciation under both IFRS and U.S. GAAP.

Identify measurement differences in financial reporting between IFRS and U.S. GAAP.

Understand the corporate policy implications on subsidiary accounting practices, especially concerning depreciation.

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Definitions:

Detailed Cost Estimates

Detailed cost estimates refer to the comprehensive evaluation of all anticipated costs involved in completing a project, task, or product development.

Actual Cost

The true, total expense incurred for a project, activity, or item.

Earned Value

A project management technique for measuring project performance and progress in an objective manner.

Actual Cost

The final, real amount spent on completing a specific task, project, or acquisition, as opposed to estimated or budgeted costs.