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The share capital of DEF Co at 31 December 19X1 was $50,000,000. This is analysed as follows: Class 'A' $1 ordinary shares: $30m; Class 'B' $1 ordinary shares: $20m. Each 'A' share carries one vote whereas each 'B' share carries two votes. ABC Co acquires the following interest in DEF Co at 31 December 19X1: Class 'A' $1 ordinary shares: $16m; Class 'B' $1 ordinary shares: $9m. ABC Co has other subsidiaries and must produce consolidated accounts. Which of the following options correctly describes the accounting treatment of the investment in DEF Co in the consolidated accounts? A. DEF is treated as an associated company. B. As the value of shares held in DEF equals 50% by value of DEF share capital, the investment is treated as a joint venture. C. DEF is treated as a 50% owned subsidiary. D. DEF is treated as a subsidiary with a non-controlling interest of 51.5%. |