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One company acquires another company in a combination accounted for under the acquisition method. The acquiring company decides to apply the initial value method in
One company acquires another company in a combination accounted for under the acquisition method. The acquiring company decides to apply the initial value method in accounting for the combination. What is one reason the acquiring company might have made this decision? Multiple Choice It is the only method allowed by the SEC. It is relatively easy to apply. It is the only internal reporting method allowed by generally accepted accounting principles. Operating results on the parent's financial records reflect consolidated totals. When the initial value method is used, no worksheet entries are required in the consolidation process. I dont understand the answer provided. The question is asking why would a company change from the acquisition method to the initial value method. Could you please answer the question for initial value please?
One company acquires another company in a combination accounted for under the acquisition method. The acquiring company decides to apply the initial value method in accounting for the combination. What is one reason the acquiring company might have made this decision?
Multiple Choice
It is the only method allowed by the SEC.
It is relatively easy to apply.
It is the only internal reporting method allowed by generally accepted accounting principles.
Operating results on the parent's financial records reflect consolidated totals.
When the initial value method is used, no worksheet entries are required in the consolidation process.
I dont understand the answer provided. The question is asking why would a company change from the acquisition method to the initial value method. Could you please answer the question for initial value please?
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