In the Situation in Which a Subsidiary Revalues Its Non-Current

Multiple Choice

In the situation in which a subsidiary revalues its non-current assets to fair value in its books as part of being acquired by a parent entity,the accounting treatment is:

A) To treat the revaluation according to AASB 116 'Property, plant and equipment' in the books of the subsidiary entity.
B) To create an asset revaluation reserve in the consolidated accounts and write it off against the parent entity's investment in the subsidiary.
C) To adjust the investment recorded by the parent entity so that the entry balances in the elimination entry.
D) Determined by AASB 127 'Consolidated and Separate Financial Statements', which is concerned with the treatment of the revaluation in the books of the controlled entity. It requires the adjustment to fair value to be written off to the income statement.
E) None of the given answers.