When fresh-start reporting is used according to Statement of Position (SOP) 90-7 (now incorporated in FSB ASC topic 852) , the implication is that a new firm exists. Which of the following statements is NOT correct about fresh-start accounting?
A) Assets are reported at fair values.
B) Beginning retained earnings is reported at zero.
C) The fair value of the assets must be less than the post liabilities and allowed claims.
D) The original owners must own less than 50% of the voting stock after reorganization.
Correct Answer:
Verified
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