After the Introduction of the Entity Method in Canada, Many

question 41

Essay

After the introduction of the entity method in Canada, many companies opted to value the non-controlling interest in subsidiaries based on the fair value of the subsidiary's identifiable net assets at the acquisition date instead of valuing the non-controlling interest at its fair value. That is, they opted to use the parent company extension approach rather than the entity method when preparing consolidated financial statements. What motivation might preparers of consolidated financial statements have that would cause them to have this preference?

---

Definitions:

Marbury V. Madison

A landmark U.S. Supreme Court case in 1803 that established the principle of judicial review in the United States, meaning that American courts have the power to strike down laws, statutes, and some government actions that they find to violate the Constitution.

Judiciary Act

Legislation passed by Congress to establish the federal judiciary system, including the Supreme Court, federal district and circuit courts, and the office of the Attorney General.

Writs Of Mandamus

Court orders that command a public official, government agency, or another court to perform a specific act required by law.

Chief Justice

The head judge of the Supreme Court in a country, holding the highest judicial position in the judicial branch of government.