Asked by Marcos Urbina on May 17, 2024
Verified
If the carrying amount of an asset of a subsidiary in a business combination is increased to fair value,on consolidation the group will record:
A) a deferred tax liability.
B) a deferred tax asset.
C) a gain on bargain purchase.
D) none of the above.
Carrying Amount
The book value of assets and liabilities that is reported in the financial statements, calculated as the original cost minus any depreciation, amortization, or impairment costs made against the asset.
Fair Value
The financial figure anticipated when disposing of an asset or the price to move a liability in a regulated exchange involving market entities on the date of valuation.
- Understand the differential treatment of tax for investments in subsidiaries and the adjustments to deferred tax assets and liabilities on consolidation.
Verified Answer
Learning Objectives
- Understand the differential treatment of tax for investments in subsidiaries and the adjustments to deferred tax assets and liabilities on consolidation.
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