A parent buys 32 percent of a subsidiary in one year and then buys an additional 40 percent in the next year. In a step acquisition of this type, the original 32 percent acquisition should be maintained

A). Maintained at its initial value
B). Adjusted to fair value at the date of the second acquisition with a resulting gain or loss recorded
C). Adjusted to its equity method balance at the date of the second acquisition
D). Adjusted to fair value at the date of the second acquisition with a resulting adjustment to additional paid-in capital

Answer rating: 100% (QA)

option b is correct Adjusted to fair value on the date of second acquisition with r... View the full answer