Under the equity method in accounting for P&L of the subsidiary in the parent books, In case of subsidiaries achieved profits. Accounting entry?

Question

a) From:-  investment in the subsidiary 
           To:   investment profits in subsidiary

b) From:-  investment profits in subsidiary
            To:-   investment in subsidiary

c) From:- cash account 
            To:- the investment in subsidiary

d) From:-  accrued investment profits 
             To:-  the investment in subsidiary

Mohamed Ibrahim Soliman · Answer

A is the correct entry

Basel Al Bader, CMA, CFM · Answer

For unconsolidated subsidiary the answer under equity method will be A

Mohamed Adel · Answer

A is the correct answer...............

Venu Gopal Malapati · Answer

<p>Answer : A</p>

Akram Massoud · Answer

a) From:- investment in the subsidiary To: investment profits in subsidiary

Rehan Zia · Answer

All four options are incorrect. Rather, the question itself is incorrect! There is no option to use equity method for subsequent measurement of investment in subsidiaries, in both cosolidated and separate financial statements.

In the books of the Parent Company (i.e separate financial statements) the investment in a subsidiary is measured at either cost or in accordance with IFRS9 (as per para10 to IAS27)

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Under the equity method in accounting for P&L of the subsidiary in the parent books, In case of subsidiaries achieved profits. Accounting entry?

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