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Parent Company Debt Related to Subsidiary Acquisitions ISSUE



Should parent company debt used to finance the acquisition of a subsidiary be pushed down to the subsidiary's financial statements in cases in which the parent company intends to push down the new basis of assets and liabilities to the subsidiary's separate financial statements? EITF DISCUSSION The Task Force was unable to reach a consensus on this issue. The SEC Observer noted that pushdown of the acquisition debt has been required in some but not all cases. The Task Force believed that individual circumstances should determine the appropriate answer. STATUS In October 1987, the FASB issued Statement 94, which addresses the consolidation of all majorityowned subsidiaries. However, that Statement does not address the above issue. Issues affecting reporting by an entity that is or has been a subsidiary (which include so-called push-down or new basis accounting questions) will be addressed in later stages of the FASB's project on the reporting entity, including consolidations and the equity method. Copyright © 1984, Financial Accounting Standards Board Not for redistributio

Year: 1984
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