Asked by Rebekah Gonzalez on Jun 18, 2024
Verified
Adjustments required in a reverse acquisition only affect the consolidated financial statements.
Reverse Acquisition
An acquisition where the acquiring company is considered the subsidiary and the target company is considered the parent in financial reporting.
Consolidated Financial Statements
Financial statements that present the assets, liabilities, equity, income, expenses, and cash flows of a parent company and its subsidiaries as if they were a single economic entity.
- Gain an understanding of the theory and procedural approach to the accounting for reverse acquisitions.
Verified Answer
AU
Alyson UteggJun 22, 2024
Final Answer :
True
Explanation :
Adjustments made in a reverse acquisition affect the consolidated financial statements as they involve the combination of financial statements of the acquirer and the acquiree, resulting in a new reporting entity. These adjustments do not affect the financial statements of the individual entities before the combination.
Learning Objectives
- Gain an understanding of the theory and procedural approach to the accounting for reverse acquisitions.