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Why amortization needed to be removed on the consolidation

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Reference no: EM132993309

When a parent company uses the equity method to account for investment in a subsidiary, the amortization expense entry recorded during the year is eliminated on a consolidation worksheet as a component of Entry I.

Problem 1: What is the necessity of removing this amortization?

Problem 2: Why the amortization needed to be removed on the consolidation worksheet?

Reference no: EM132993309

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