Which of the following statements regarding consolidated financial statements at the date of acquisition is FALSE?
A)Fair value adjustments are used to recognize the identifiable assets and liabilities of the subsidiary at fair values and goodwill measured as a residual amount.
B)The pre-acquisition adjustments eliminate the pre-acquisition equity of the subsidiary and the investment account recorded by the parent.
C)When the subsidiary has recorded goodwill at acquisition date, adjustments must be made in the acquisition analysis to determine the amount of goodwill to be adjusted in the consolidation process.
D)When the subsidiary has recorded a dividend payable at acquisition date, this must be excluded when calculating the consideration received.

Question

Quizplus · Accepted Answer

This statement is false because a dividend payable at acquisition date should not be excluded when calculating the consideration received. The dividend payable should be included as part of the subsidiary's liabilities and deducted from the consideration paid to determine the net assets acquired.

Which of the Following Statements Regarding Consolidated Financial Statements at the Date