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. AM when separate incorporation is maintained FV remains basis for initially consolidating the subsidiary's assets and liabilities. Acquiring firm records a JE on its

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. AM when separate incorporation is maintained FV remains basis for initially consolidating the subsidiary's assets and liabilities. Acquiring firm records a JE on its books reflecting o Differences: consolidation of financial info. is only simulated; acquiring company does not physically record acquired assets and liabilities. No dissolution, each company maintains are used to prepare consolidated FS. WS operates by either adjusting or eliminating various account balances of parent and subsidiary. Consolidation JES are never recorded o Contingencies have value to those who receive the consideration and represent measurable obligations of the acquirer. And need to be discounted for time value of money and risk

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