According to FASB Statement No.141,liabilities assumed in an acquisition will be valued at the ________.
A)reasonably estimated fair value
B)historical book value
C)current replacement cost
D)present value using market interest rates

Question

Quizplus · Accepted Answer

FASB Statement No.141 requires that liabilities assumed in an acquisition be valued at their reasonably estimated fair value, rather than their historical book value or current replacement cost. This reflects the idea that the acquiring company should recognize the true cost of assuming these liabilities, rather than simply the historical cost incurred by the target company. The present value using market interest rates may be used to estimate the fair value of future payments associated with these liabilities.