Problem $3-2($Static$)($LO $3-2)$

A company acquires a subsidiary and will prepare consolidated financial statements for external reporting purposes. For internal reporting pu

has decided to apply the equity method. Why might the company have made this decision?

Multiple Choice

Operating results appearing on the parent's financial records reflect consolidated totals.

Consolidation is not required when the parent uses the equity method.

GAAP now requires the use of this particular method for internal reporting purposes.

It is a relatively easy method to apply.