Where were the intangible assets on the parent or subsidiaryWhere were the intangible assets on the parent or subsidiary's balance sheets? On the parent's balance sheet embedded in the equity investment account. On the subsidiary's balance sheet, each intangible asset is listed. On the parent...
Where were the intangible assets on the parent or subsidiary's balance sheets?
On the parent's balance sheet embedded in the equity investment account. On
the subsidiary's balance sheet, each intangible asset is listed. On the parent's
balance sheet embedded in the equity investment account. After the
consolidation process is complete, each intangible asset is listed on the
consolidated balance sheet. On the subsidiary's balance sheet embedded in
retained earnings. After the consolidation process is complete, each intangible
asset is listed on the consolidated balance sheet.
Answer & Explanation
In the context of accounting for intangible assets in a parent-subsidiary
relationship, here's how they are typically reported:
1. On the parent's balance sheet: Intangible assets related to a subsidiary
are often embedded in the equity investment account. This is because,
before consolidation, the parent company records its investment in the
subsidiary as a single line item on its balance sheet.
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