Question: QUESTION 1 Under the initial value method, the parent recognizes income when its subsidiary declares a dividend. Because of the brief time span between dividend

QUESTION

1

Under the initial value method, the parent recognizes income when its subsidiary declares a dividend. Because of the brief time span between dividend declarations and

cash payments, the initial value is said to reflect the

basis for income recognition.

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cash

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cash

tax

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QUESTION 1 Under the initial value method, the

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