For a business combination in which the acquirer achieves control without acquiring all the equity of the acquiree, the noncontrolling equity interest is measured:
A)either at fair value or at noncontrolling interests' proportionate share of the acquiree's net identifiable assets.
B)either at historic cost or at noncontrolling interests' proportionate share of the acquiree's net identifiable assets.
C)only at fair value.
D)either at historic cost or at controlling interests' proportionate share of the acquiree's net identifiable assets.

Question

Quizplus · Accepted Answer

Under the partial or step-acquisition method, in which an acquirer does not acquire all the equity of the acquiree, the noncontrolling equity interest is measured either at fair value or at noncontrolling interests' proportionate share of the acquiree's net identifiable assets at the date of the acquisition. The choice of measurement depends on the investor's level of influence and the existence of a fair value option. Hence, option A is the best answer.

For a Business Combination in Which the Acquirer Achieves Control