Which accounts differ on the consolidated balance sheet when using the fair value enterprise method compared to the identifiable net assets method?
A) The investment in subsidiary balance and the consolidated retained earnings balance.
B) The goodwill balance and the consolidated retained earnings balance.
C) The goodwill balance and the non-controlling interest balance.
D) The investment in subsidiary balance and the non-controlling interest balance.

Question

Quizplus · Accepted Answer

The fair value enterprise method and the identifiable net assets method differ in how they treat goodwill and non-controlling interest. The fair value method may result in a different valuation of goodwill due to the consideration of the entire fair value of the subsidiary, including synergies, and it also affects the measurement of non-controlling interest, as it is based on the fair value of the subsidiary's net assets.

Which Accounts Differ on the Consolidated Balance Sheet When Using