Companies sometimes employ accounting practices that are not necessarily in accordance with accounting theory or even current standards. In some cases, companies may be following industry practices rather than generally accepted practices. In other cases, the practices may be justified as expedient because the amounts may be immaterial.
a. How did Xerox Corporation reported the sale of stock of a subsidiary in its consolidated financial statements prior to 2008? How must such sales (assuming Xerox maintains control of the subsidiary) be reported under current standards?
b. How does Occidental Petroleum Corporation treat subsidiary preferred stock? How should subsidiary preferred stock be reported in the consolidated financial statements?