Under SFAS 141, accounting for acquisitions can no longer result in an increase in the consolidated entity's stockholders' equity.

Question

Quizplus · Accepted Answer

Under SFAS 141, accounting for acquisitions now requires the use of the purchase method, which means that the purchase price is allocated to the assets acquired and liabilities assumed. This results in a change in the consolidated entity's balance sheet, but not an increase in stockholders' equity.

Under SFAS 141, Accounting for Acquisitions Can No Longer Result