Asked by Tommy Dorfman on Jun 25, 2024
Verified
If Sun Company acquired Star,Inc.in a pooling of interests transaction,the entry would have used which one of the following to account for the pooling?
A) Fair value of Star's assets
B) Book value of Star's assets
C) Net present value of Star's assets
D) Future value of Star's assets
Pooling of Interests Transaction
A method used in accounting for business mergers in which the assets and liabilities of the merging companies are combined using their book values.
Book Value
The net value of a company's assets minus its liabilities, representing the equity value of the company from an accounting perspective.
Fair Value
The price at which an asset could be bought or sold or a liability settled, between knowledgeable, willing parties in an arm's length transaction.
- Comprehend the accounting processes and financial repercussions of allocating the purchase price in mergers and acquisitions, which encompass the allocation of excess costs and the calculation of goodwill.
Verified Answer
Learning Objectives
- Comprehend the accounting processes and financial repercussions of allocating the purchase price in mergers and acquisitions, which encompass the allocation of excess costs and the calculation of goodwill.
Related questions
The Disclosure Rules Pertaining to GAAP Accounting for Business Combinations ...
The Amount of the Excess Cost Over Book Value Attributable ...
What Is the Amount of Goodwill to Be Reported on ...
The Parent Company's Investment Account Would Include an Element Which ...
In Allocating the Cost of a Business Combination,what Is Not ...