Explain how the recognition of gains on the elimination of intercompany bond holdings is consistent with the principle of recording gains only when they are realized.
Answer to relevant QuestionsExplain how the matching principle supports the recognition of deferred income tax expense when a gain is recognized on the elimination of intercompany bond holdings. When a company sells equipment that had previously been remeasured to fair value under the revaluation model of IAS 16, it transfers the revaluation surplus from accumulated other comprehensive income directly to retained ...Enviro Facilities Inc. (EFI) is a large, diversified Canadian-controlled private company with several Canadian and U.S. subsidiaries, operating mainly in the waste management and disposal industry. EFI was incorporated more ...On December 31, Year 1, the Peach Company purchased 80% of the outstanding voting shares of the Orange Company for $964,000 in cash. The balance sheet of Orange on that date and the fair values of its tangible assets and ...On January 2, Year 1, Poplar Ltd. purchased 80% of the outstanding shares of Spruce Ltd. for $2,000,000. At that date, Spruce had common shares of $500,000 and retained earnings of $1,250,000 and accumulate depreciation of ...
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