At the date of an acquisition which is not a bargain purchase, the acquisition method
A) consolidates the subsidiary's assets at fair value and the liabilities at book value.
B) consolidates all subsidiary assets and liabilities at book value.
C) consolidates all subsidiary assets and liabilities at fair value.
D) consolidates current assets and liabilities at book value, long-term assets and liabilities at fair value.
E) consolidates the subsidiary's assets at book value and the liabilities at fair value.

Question

Quizplus · Accepted Answer

The acquisition method consolidates all subsidiary assets and liabilities at fair value. This means that the fair value of all the subsidiary's assets and liabilities is recorded on the parent company's books at the date of the acquisition. This provides the most accurate representation of the subsidiary's financial position and helps to ensure that the consolidated financial statements are meaningful and informative.

At the Date of an Acquisition Which Is Not a Bargain