Where a Parent Entity Acquires an Investment in a Subsidiary

question 17

Multiple Choice

Where a parent entity acquires an investment in a subsidiary for less than the fair value of the identifiable net assets and contingent liabilities acquired, it is necessary to recognise the item in the consolidation worksheet as a gain in bargain purchase and then to:

• A) transfer it to a business combination valuation reserve account
• B) goodwill;
• C) investment in the shares of the subsidiary;
• D) profit or loss.

---

Definitions:

Tiered Pricing

A pricing strategy where a company offers different prices for the same product or service based on certain criteria, such as quantity purchased.

Aggressive Pricing

A strategy where products or services are offered at low or reduced prices to attract customers, gain market share, or drive competitors out of the market.

Multilateral Aid Agencies

Collectively owned aid agencies.

Government Aid Agencies

Public entities that provide resources and assistance to countries or regions in need.