
Concept Introduction:
The various terms are used here.
The terms that are used here are
a. Subsidiary
A subsidiary is the company whose shares are bought by another company. But the purchasing company must buy shares more than 50% of ownership.
b. Parent
A parent company is the company shares of the other company more than 50% of ownership. The company whose shares are bought by another company is treated as subsidiary.
c. Interest revenue
It is the revenue earned on the debt securities. The debt securities can be available-for-sale as well long term
d. Current assets
The assets which are held for a short-period.
e. Fair value
It is the market value of something at the prevailing time. Fair value if used to record available-for-sale securities on the balance sheet.
f. Equity method
This method is used in case, a company purchased investment ranging from 20 % to 50 % of ownership and that gives a significant control to the investor over the investee.
The mentioned terms have been discussed.
To complete:
The descriptions by filling in the blanks using the terms given.
Given terms
a. Subsidiary
b. Parent
c. Interest revenue
d. Current
e. Fair value
f. Equity method

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Chapter 15 Solutions
Fundamental Accounting Principles
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