Which of the following methods of accounting for a business combination is based on the premise that no substantive transaction occurs between the companies involved?

Question

Quizplus · Accepted Answer

The pooling of interests method is based on the premise that no substantive transaction occurs between the companies involved. Under this method, the assets and liabilities of the two companies are simply added together, and there is no recognition of goodwill or other intangible assets. This method was allowed under previous accounting standards but has been largely replaced by the purchase method in current practice.

Which of the Following Methods of Accounting for a Business