In the Situation in Which a Subsidiary Revalues Its Non-Current

question 67

Multiple Choice

In the situation in which a subsidiary revalues its non-current assets to fair value in its books as part of being acquired by a parent entity,the accounting treatment is:

• A) To treat the revaluation according to AASB 116 'Property, plant and equipment' in the books of the subsidiary entity.
• B) To create an asset revaluation reserve in the consolidated accounts and write it off against the parent entity's investment in the subsidiary.
• C) To adjust the investment recorded by the parent entity so that the entry balances in the elimination entry.
• D) Determined by AASB 127 'Consolidated and Separate Financial Statements', which is concerned with the treatment of the revaluation in the books of the controlled entity. It requires the adjustment to fair value to be written off to the income statement.
• E) None of the given answers.

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Definitions:

Planter Aristocracy

A social and economic class comprising wealthy landowners who held numerous slaves to farm cash crops in the American South before the Civil War.

Planter Aristocracy

A social and economic class of wealthy landowners in the antebellum South who owned large plantations and numerous slaves, exerting significant political and social influence.

Economic Self-Interest

The motivation that drives individuals to pursue their own material wealth and benefit, often considered a fundamental economic principle.

Antebellum South

Refers to the period and region of the Southern United States before the Civil War, characterized by an agrarian economy and large plantations.