Pal Co Owns 70% of the Outstanding Common Shares of Sadd

Multiple Choice

Pal Co. owns 70% of the outstanding common shares of Sadd Ltd. Sadd sold an asset to Pal at a loss. There is no evidence of impairment in the value of the asset sold to Pal. Which of the following statements about the loss is true?

A) The loss should not be eliminated because this is an upstream sale.
B) The loss should not be eliminated because there is no impairment in the value of the asset.
C) The loss should not be eliminated because Pal does not own 100% of Sadd.
D) The loss should be eliminated.