When the parent company uses the cost method, an adjustment must be made to its retained earnings

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When the parent company uses the cost method, an adjustment must be made to its retained earnings on consolidation in every year after the year of acquisition. Why is this entry necessary? Why is a similar entry not required when the parent utilized the equity method?
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Modern Advanced Accounting In Canada

ISBN: 9781259066481

7th Edition

Authors: Hilton Murray, Herauf Darrell

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