In an Acquisition of Land by a Parent from a Subsidiary

question 59

Multiple Choice

In an acquisition of land by a parent from a subsidiary, the realization of profit acquired on the land acquisition is recorded in the consolidated financial statements?

• A)In the first year that the group's consolidated financial statements are prepared.
• B)When the asset is subsequently sold to a party outside of the group.
• C)As it is amortized over the period of the life of the other assets.
• D)No profit will be realized because land is not amortized.

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Definitions:

Own Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, ceteris paribus.

Market Demand

The total quantity of a product or service that all consumers in a market are willing and able to purchase at different prices, over a specified period of time.

Affirmative Defense

A response to a plaintiff’s claim that does not deny the plaintiff’s facts but attacks the plaintiff’s legal right to bring an action. An example is the running of the statute of limitations.

Default Judgement

Default Judgement is a binding judgment in favor of either party based on some failure to take action by the other party, most often the failure to respond to a court summons.