When should the change in accounting for a long-term investment from the cost method to the equity method be accounted for retroactively, and when should it be accounted for prospectively?
Answer to relevant QuestionsWhen a parent increases its investment in a subsidiary from 60 to 75%, should the acquisition differential from the 60% purchase be remeasured at fair value? Explain. For the past 10 years, Prince Company (Prince) has owned 75,000 or 75% of the common shares of Stiff Inc. (Stiff). Elizabeth Winer owns another 20% and the other 5% are widely held. Although Prince has the controlling ...Craft Ltd. held 80% of the outstanding ordinary shares of Delta Corp. as at December 31, Year 12. In order to establish a closer relationship with Nonaffiliated Corporation, a major supplier to both Craft and Delta, all ...On December 31, Year 5, the accountant of Regent Corporation prepared a reconciliation (see below), which was used in the preparation of the consolidated financial statements on that date. Additional Information • On ...Explain the similarities and differences between a subsidiary and a variable interest entity and between a majority shareholder for a subsidiary and a primary beneficiary for a variable interest entity.
Post your question