The use of ______________ as the key criterion to determine the acquisition date ensures that the substance of the transaction determines the accounting rather than the form of the transaction.
A)physical possession
B)control
C)payment of consideration
D)valuation.

Question

Quizplus · Accepted Answer

Control is the most appropriate criterion to determine the acquisition date because it focuses on whether the acquirer has obtained the ability to direct the relevant activities of the acquiree. This ensures that the substance of the transaction, i.e. the effective control, is the determining factor rather than the form of the transaction or other factors like payment or valuation. Physical possession and payment of consideration may not always be reliable indicators of control, while valuation is not a relevant criterion for determining the acquisition date.

The Use of ______________ as the Key Criterion to Determine