When a Parent Entity Has Previously Held an Investment in a Subsidiary

question 22

Multiple Choice

When a parent entity has previously held an investment in a subsidiary prior to gaining control the effect on the consolidation process is as follows:

• A)there is no impact
• B)the change in the fair value of the previously held interest is recognised in profit or loss
• C)the change in the fair value of the previously held interest is recognised in retained earnings
• D)the change in the fair value of the previously held interest is recognised in other comprehensive income

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Definitions:

Resource Constraint

Limitations or restrictions on available resources, such as time, money, or manpower, which can affect project outcomes or business operations.

Scarcity

This refers to the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

Full-Time Employment

A work status involving employees who typically work a minimum number of hours defined by their employer, often with benefits and salaries.

Skills

The abilities and expertise that enable an individual to perform tasks effectively.