Chapter 2 - Consolidation of Wholly Owned Subsidiaries with No Differential Flashcards
1
Q
No Differential
A
Consideration = BV of NIA
2
Q
J/E - Dividend Income
A
Dr. Cash
Cr. Income from ——
3
Q
Cost Method
A
- Less 20%
- Insignificant Influence
- Investment is carried at cost until time of sale
4
Q
Liquidating Dividend
A
- Used when Net Income is less than Dividends Paid
- Treated as a return of capital
5
Q
Equity Method
A
- All dividends are treated as liquidating dividends
- 20% or more (significant influence)
6
Q
Fair Value Method
A
- Investment is carried at FAIR VALUE
- Income = Dividend Income + Change in FV
