With regard to convergence of accounting for business combinations between IFRS and U.S.GAAP, the major changes to U.S.GAAP include:
A)classifying noncontrolling interests as assets.
B)use of acquisition method for business combination.
C)recognizing in-process research and development costs as expense.
D)recognizing incurred research costs as liabilities.

Question

Quizplus · Accepted Answer

The major change to U.S. GAAP in convergence with IFRS for accounting for business combinations is the use of the acquisition method, where the acquiree's identifiable assets, liabilities, and noncontrolling interests are recognized at fair value on the acquisition date. Classifying noncontrolling interests as assets and recognizing in-process research and development costs as expense are both examples of differences between U.S. GAAP and IFRS that have not been converged. Recognizing incurred research costs as liabilities is not a major change related to accounting for business combinations.

With Regard to Convergence of Accounting for Business Combinations Between