If a Subsidiary Makes a Dividend Payment Out of Pre-Acquisition

question 54

True/False

If a subsidiary makes a dividend payment out of pre-acquisition earnings,the parent entity should consider whether its investment in the subsidiary is impaired.

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Definitions:

Business Process Reengineering

A management strategy focusing on the analysis and redesign of workflows and business processes within an organization to achieve dramatic improvements.

Workflows

The sequence of industrial, administrative, or other processes through which a piece of work passes from initiation to completion.

Institutionalized Rationality

A concept that refers to the accepted logic and reasoning embedded within institutions, guiding their structures and processes.

Decision-making

The process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.