Question
A parent company owns a 90% interest in a subsidiary at the start of the year and during the yearsells a 10% interest to reduce
A parent company owns a 90% interest in a subsidiary at the start of the year and during the yearsells a 10% interest to reduce its ownership percentage to 80%. The most popular view of the transactionunder current consolidations theory is that
a. it is a sale of an investment at a gain or a loss.
b. it is likened to a treasury stock transaction that may not result in a gain or a loss.
c. it is a transaction between the controlling and minority ownership interests and has no effect onconsolidated income.
d. the increase or decrease in equity as a result of the sale is an adjustment to donated capital.
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