Mega Corporation acquired 65% of the voting shares of Forko Ltd and consolidated its accounts by restating assets and liabilities of the subsidiary at fair value on the date the shares were acquired. What method of accounting for the business combination is Mega Corporation using?
A)Purchase method
B)Fair value method
C)Pooling method
D)Current replacement cost method

Question

Quizplus · Accepted Answer

Mega Corporation is using the purchase method, which involves consolidating the subsidiary's accounts by restating its assets and liabilities at their fair values on the acquisition date.

Mega Corporation Acquired 65% of the Voting Shares of Forko