Question
In Japan, the pooling method is still permitted in business combinations. Unlike the United States and the United Kingdom, whose groups follow a hierarchical structure,
In Japan, the pooling method is still permitted in business combinations. Unlike the United States and the United Kingdom, whose groups follow a hierarchical structure, Japans groups are described as headless combinations or Keiretsu and are built around trust and loyalty. As such, it is difficult to distinguish a parent corporation among the relationships.
1.) What are some of the problems of using the majority shareholder rule to consolidate Japanese financial statements?
2.) What are the reasons behind using a pooling method over a purchase method?
3.) What effect do these different treatments have on the financial statements?
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