The fair value adjustments are required to eliminate the carrying amount of the parent's investment in the subsidiary and the parent's portion of pre-acquisition equity.

Question

Quizplus · Accepted Answer

Fair value adjustments are made to adjust the values of the subsidiary's assets and liabilities to their fair values at the acquisition date. They do not eliminate the carrying amount of the parent's investment in the subsidiary or the parent's portion of pre-acquisition equity; instead, they ensure that the consolidated financial statements reflect the fair values of the acquired assets and liabilities.

The Fair Value Adjustments Are Required to Eliminate the Carrying