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:

Government In Sunshine Act

A U.S. law aimed at ensuring that meetings of government agencies are conducted in public and records of such meetings are available to the public.

Non-Collegiate Body

An organization or group that functions outside the traditional college or university structure.

Quorum

The minimum number of members required to be present at a meeting to make the proceedings of that meeting valid.

Environmental Protection Agency (EPA)

A U.S. federal agency responsible for protecting human health and the environment by enforcing regulations based on laws passed by Congress.