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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?

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

Accounting IAS Budgeting IFRS Finance
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Question added by Rashad Moursi , Finance Director & Business Development, International Business Transformer Owners Repr. - Hotels , Investment and financial
Date Posted: 2014/05/17
Upvote (0) Views (18) Followers (1) Answers (6) Report Question
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Mohamed Ibrahim Soliman
by Mohamed Ibrahim Soliman , Financial Controller, acting CFO , Sinad Holding Co

A is the correct entry

Basel Al Bader, CMA, CFM
by Basel Al Bader, CMA, CFM , Internal Audit Senior Manager , Kuwait Telecommunication Company- VIVA

 

For unconsolidated subsidiary the answer under equity method will be A   

 

Mohamed Adel
by Mohamed Adel , Group Financial Manager , Alahly Sabbour real-estate Developments

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

Venu Gopal Malapati
by Venu Gopal Malapati , Assistant Finance Manager , Foulath Group

Answer : A

Akram Massoud
by Akram Massoud , FINANCE MANAGER , Autoexcellence LTD

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

Rehan Zia
by Rehan Zia , Group Manager Finance , Anker Management Logistics & Services LLC

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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