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Explanation B Fair value Carrying value 75000 Carrying value Fair value Inventory 90000 20000 25000 Land 120000 80000 70000 80000 1. If (B) merged with
Explanation B Fair value Carrying value 75000 Carrying value Fair value Inventory 90000 20000 25000 Land 120000 80000 70000 80000 1. If (B) merged with (A), the inventory in (A) balance sheet will be 2. If A and B make agreement to form a new company C, the land in C balance sheet will be 3. If there is a full parent subsidiary relationship between A and B. the inventory in consolidated balance sheet will be parent concept + If there is a 80 parent subsidiary relationship between A und B the inventory in consolidated balance sheet will be economic concept
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