Question
A company issues new stock with a fair value of $120,000 to acquire 85% of the stock of another company. The fair value of the
A company issues new stock with a fair value of $120,000 to acquire 85% of the stock of another company. The fair value of the noncontrolling interest at the date of acquisition is $19,000, and the book value of the acquired company is $15,000. The subsidiary's net assets are reported at amounts approximating fair value at the date of acquisition, except that its plant assets are overvalued by $25,000, its reported license agreements are undervalued by $30,000, and it has previously unreported identifiable intangible assets with a fair value of $50,000. At what amount is the noncontrolling interest valued at the date of acquisition, following the alternative method allowed by IFRS?
| A. | $10,500 |
| B. | $ 2,250 |
| C. | $18,000 |
| D. | $19,000 |
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