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when the parent company foes not acquire 100% of the stock of the subsidiary the fair value of the subsidiary is a. sti...

when the parent company foes not acquire 100% of the stock of the subsidiary the fair value of the subsidiary is
a. still meadured as a whole unit
b. at the purchase consideration paid by parent company
c. at the market proce of the stock of the subsidiary company
d. measured only for the % of holding of stock by the parent company
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Answer #1

Solution: at the market price of the stock of the subsidiary company

Explanation: When subsidiary’s share capital for less than 100% has been acquired then rule for inclusion of the subsidiary’s assets states that all the assets should appear on the consolidated balance sheet. The acquired subsidiary purchase price above its fair value is termed as Goodwill. The fair value of the subsidiary is stock's market price of the subsidiary company

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