*ABC Company, a global conglomerate, has multiple subsidiaries operating in different countries. As part of its financial reporting, the company needs to consolidate its financial statements to present a comprehensive view of its overall financial performance and position. Which of the following statements regarding the consolidation process is correct? A. In the consolidation process, the parent company's financial statements are combined with the financial statements of all its subsidiaries without any adjustments or eliminations. B. The consolidation process involves aggregating the revenues and expenses of the parent company and its subsidiaries, but intercompany transactions and balances are not eliminated. C. Under the equity method of consolidation, the parent company includes the subsidiary's revenues and expenses in its financial statements, but the subsidiary's assets and liabilities are not combined with the parent's. D. In the consolidation process, goodwill is recognized when the parent company acquires more than 20% ownership in a subsidiary, and it represents the excess of the cost of acquisition over the fair value of the subsidiary's identifiable net assets. E. When preparing consolidated financial statements, any unrealized gains or losses arising from intercompany transactions are recognized in the consolidated income statement but not adjusted in the consolidated balance sheet.*
*ABC Company, a global conglomerate, has multiple subsidiaries operating in different countries. As part of its financial reporting, the company needs to consolidate its financial statements to present a comprehensive view of its overall financial performance and position.
Which of the following statements regarding the consolidation process is correct?
A. In the consolidation process, the parent company's financial statements are combined with the financial statements of all its subsidiaries without any adjustments or eliminations.
B. The consolidation process involves aggregating the revenues and expenses of the parent company and its subsidiaries, but intercompany transactions and balances are not eliminated.
C. Under the equity method of consolidation, the parent company includes the subsidiary's revenues and expenses in its financial statements, but the subsidiary's assets and liabilities are not combined with the parent's.
D. In the consolidation process,
E. When preparing consolidated financial statements, any unrealized gains or losses arising from intercompany transactions are recognized in the consolidated income statement but not adjusted in the consolidated balance sheet.*
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