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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Mohammad Iqbal Abubaker
05-March-2017

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

Question added by Rashad Moursi , Financial and Administrative Officer & international Business Transformer, Hotel Owner Reprs. , Investment and financial
Date Posted: 2014/05/17

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6 Answers

by Mohamed Ibrahim Soliman , Financial Controller, acting CFO , Sinad Holding Co

A is the correct entry

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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

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

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

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by Venu Gopal Malapati , Assistant Finance Manager , Foulath Group

Answer : A

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by Akram Massoud , FINANCE MANAGER , Autoexcellence LTD

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

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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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