Upstream Sales of Depreciable Assets from a Subsidiary to a Parent

question 6

True/False

Upstream sales of depreciable assets from a subsidiary to a parent result in unrealized gains or losses in the subsidiary accounts in the year after the sale.

---

Definitions:

Continuing Operations

Part of a company's business that is expected to continue operating into the foreseeable future, excluding any discontinued operations.

Unusual Items

Nonrecurring or unique charges or gains that are not expected to happen regularly, such as costs from lawsuits, restructuring, or natural disasters, that are reported separately in a company's financial statements.

Accounting Principles

Principles that provide the framework upon which accounting standards are constructed.

Common-Sized Financial Statements

Financial statements that present all line items as a percentage of a common base figure, facilitating comparison across periods or companies.