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What is meant by an interim (or mid-year) acquisition of a subsidiary's shares? Multiple Choice The...

What is meant by an interim (or mid-year) acquisition of a subsidiary's shares?

Multiple Choice

  • The parent restates its net income to include both pre-acquisition and post-acquisition earnings of the subsidiary.

  • The parent dividends its net income into pre-acquisition and post-acquisition earnings.

  • The parent purchases the subsidiary's non-voting shares.

  • The parent purchases a controlling interest in the subsidiary's equity at some time other than the end of the fiscal year.

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Answer #1
  1. Usually the parent company purchases shares of its subsidiaries to maintain control over the subsidiary at the beginning or else at the end of the year.
  2. But sometimes due to any internal reasons the parent companies may go for the purchase of its subsidiaries shares to maintain liquidity in its subsidiary or some other reasons.
  3. Therefore the answer is," The parent purchases a controlling interest in the subsidiary's equity at some time other than the end of the fiscal year."
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