11.1

(a) What criterion is used to determine whether a parent–subsidiary relationship exists?

(b) Why have a subsidiary or subsidiaries?

(c) Suppose company A buys 100 per cent of the shares of B for cash. How does B record this transaction in its books?

(d) Distinguish between control of an enterprise and significant influence over an enterprise.

(e) What is the equity method? When do you apply it?

(f ) How do you account for investments of less than 20 per cent in other enterprises?