Problem:
In the grand scheme of things, the entire subsidiary is not purchased. This begs the question of how much control the parent company has over the subsidiary. Please consider the following questions:
Required:
Question 1: What are the three brackets of control?
Question 2: How are each of these brackets classified?
Question 3: What special accounting considerations are expected for each of the brackets of control?
Note: Provide support for your rationale.