In consolidated statements where the initial acquisition is accounted for with the purchase method, the assets of the acquired firm are revalued to current costs. In consolidated statements where the initial acquisition is accounted for with the pooling-of-interests method, no assets are revalued.

a What would be the effect on consolidated statements if the assets of both acquiring and acquired firms were revalued to current market values?

b What would be the logic to consolidations based on revalued assets for both firms?