Which of the Following Is Not an Effect of Choosing

question 30

Multiple Choice

Which of the following is not an effect of choosing the partial goodwill method over the full goodwill method?

• A) There will be differences in the reported amounts at acquisition date in the consolidated statements.
• B) It is more costly to measure the NCI under the partial goodwill method.
• C) Where the parent acquires some or all of NCI after obtaining control, there will be a higher impact on equity attributable to the parent shareholders.
• D) The impairment test on goodwill after acquisition will be more complex under the partial goodwill method.

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Definitions:

Rational Pricing

A financial theory stating that asset prices will reflect all available information and respond rationally to changing conditions.

Risk Averse

The preference for certainty over uncertainty, with individuals or entities avoiding risks when making decisions.

Interest Rates

The cost of borrowing money, expressed as a percentage of the total amount loaned, or the return on invested money.

Efficient Markets Hypothesis

A theory that suggests financial markets are informationally efficient, meaning prices of traded assets reflect all available information at any given time.