Assume That a Parent Company Has Four Subsidiaries

question 20

Multiple Choice

Assume that a parent company has four subsidiaries. Under IFRS 3, which of the following statements is true?

• A)All four subsidiaries must be reported using the parent-company extension method.
• B)All four subsidiaries must be reported using the entity method.
• C)Each subsidiary must be reported using either the parent-company extension method or the entity method. Consistency is not required.
• D)All four subsidiaries must be reported using either the parent-company extension method or the entity method. Consistency is required.

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Definitions:

Receiver

The person who interprets a message.

Communicator

An individual who conveys information or expresses ideas effectively, using verbal, nonverbal, written, and visual methods.

Product Launch

The introduction of a new product into the market, often accompanied by marketing efforts.

Source

The originator of a thought or emotion, who puts it into a code that can be understood by a receiver.