A Parent Company Reduced Its Ownership in Its Subsidiary from 80

question 3

Multiple Choice

A parent company reduced its ownership in its subsidiary from 80% to 15%. How should this be reported on the parent's consolidated financial statements?

• A)As a disposal of its interest in the subsidiary and a reacquisition of the retained interest at fair value
• B)As a disposal of its interest in the subsidiary and a reacquisition of the retained interest at book value
• C)As a write-down to the retained interest
• D)As an adjustment to the shareholders' equity

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Definitions:

Form Perception

The cognitive process of recognizing and understanding the shapes and structures of objects in one's environment.

Color Vision

The ability of the eye to distinguish objects based on the wavelengths of the light they reflect, emit, or transmit.

Lens

A transparent structure in the eye that focuses light on the retina to create clear images.

Retina

A thin layer of tissue at the back of the eye that contains cells sensitive to light, which trigger nerve impulses that pass via the optic nerve to the brain.