When Consolidating a Subsidiary Under the Equity Method, Which of the Following

question 87

Multiple Choice

When consolidating a subsidiary under the equity method, which of the following statements is true with regard to the subsidiary subsequent to the year of acquisition?

• A) All net assets are revalued to fair value and must be amortized over their useful lives.
• B) Only net assets that had excess fair value over book value when acquired by the parent must be amortized over their useful lives.
• C) All depreciable net assets are revalued to fair value at date of acquisition and must be amortized over their useful lives.
• D) Only depreciable net assets that have excess fair value over book value must be amortized over their useful lives.
• E) Only assets that have excess fair value over book value must be amortized over their useful lives.

---

Definitions:

Noncompete Clause

A contract provision that restricts an employee from working with competing firms or starting a similar business for a specified period after leaving the company.

Realistic Job Previews

An HR practice involving giving prospective employees a true picture of what their job would entail, including both positive and negative aspects, to ensure proper fit.

Employee Assistance Programs

Workplace-supported programs to help employees deal with personal problems that might adversely impact their work performance, health, and well-being.

Involuntary Turnover

Is terminating employees whose services are no longer desired.