Question
If a parent company wished to participate in off-balance sheet financing with one of the companies it is invested in, which of the following options
If a parent company wished to participate in off-balance sheet financing with one of the companies it is invested in, which of the following options can it follow under GAAP?\ Keep their ownership percentage at less than
50%, which would preclude them from having to consolidate and report the debt on their SFP.\ Sell its shares in the subsidiary to outside investors.\ Use the cost method of accounting for the investment, which would avoid having to report the debt on its SFP.\ Maintain ownership greater than
50% and consolidate financial reporting with the subsidiary.
If a parent company wished to participate in off-balance sheet financing with one of the companies it is invested in, which of the following options can it follow under GAAP? Keep their ownership percentage at less than 50%, which would preclude them from having to consolidate and report the debt on their SFP. Sell its shares in the subsidiary to outside investors. Use the cost method of accounting for the investment, which would avoid having to report the debt on its SFP. Maintain ownership greater than 50% and consolidate financial reporting with the subsidiary
If a parent company wished to participate in off-balance sheet financing with one of the companies it is invested in, which of the following options can it follow under GAAP?\ Keep their ownership percentage at less than
50%, which would preclude them from having to consolidate and report the debt on their SFP.\ Sell its shares in the subsidiary to outside investors.\ Use the cost method of accounting for the investment, which would avoid having to report the debt on its SFP.\ Maintain ownership greater than
50%and consolidate financial reporting with the subsidiary.
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Auditing A Risk Based Approach to Conducting a Quality Audit
Authors: Karla Johnstone, Audrey Gramling, Larry E. Rittenberg
10th edition
978-1305080577
