Under the economic entity concept, the net assets of the subsidiary will be recorded at their fair value that is implied by the price paid by the parent company in their consolidated financial statements. What will the conceptual problems be if those valuation approaches are implemented?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter1: Introduction And Goals Of The Firm
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Under the economic entity concept, the net assets of the subsidiary will be recorded at their fair value that is implied by the price paid by the parent company in their consolidated financial statements. What will the conceptual problems be if those valuation approaches are implemented? 

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