Gain or Loss Resulting from an Intercompany Sale of Equipment

Multiple Choice

Gain or loss resulting from an intercompany sale of equipment between a parent and a subsidiary is:

A) recognized in the consolidated statements in the year of the sale.
B) considered to be realized over the remaining useful life of the equipment as an adjustment to depreciation in the consolidated statements.
C) considered to be unrealized in the consolidated statements until the equipment is sold to a third party.
D) amortized over a period not less than 2 years and not greater than 40 years.