Where the Value of an Investment in a Subsidiary Increases,a

question 33

Multiple Choice

Where the value of an investment in a subsidiary increases,a deferred tax liability is generally not required to be recognised when:

• A) it is unlikely that profits of the subsidiary will be distributed as dividends.
• B) it is unlikely that the subsidiary investment will be sold.
• C) both A and B.
• D) none of the above.

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Definitions:

Management Accounting

The method involves creating managerial reports and financial records that deliver precise and prompt financial and statistical data needed by managers for making daily and near-term decisions.

Decision Making

The process of choosing among multiple options or courses of action, based on factors such as data analysis, strategic goals, and resource availability.

Cost Driver

A factor that causes the cost of an activity or process to change, used in activity-based costing to allocate overheads more accurately.

Responsibility Centre

A unit or department within an organization, headed by a manager, who is accountable for its activities and financial performance.