In Measuring the Noncontrolling Interest Immediately Following the Date of Acquisition

question 116

Multiple Choice

In measuring the noncontrolling interest immediately following the date of acquisition, which of the following would not be indicative of the value attributed to the noncontrolling interest?

• A) Fair value based on stock trades of the acquired company.
• B) Subsidiary cash flows discounted to present value.
• C) Book value of subsidiary net assets.
• D) Projections of residual income.
• E) Consideration transferred by the parent company that implies a total subsidiary value.

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Definitions:

False Code

An incorrect, misleading, or deceptive set of rules or instructions, commonly referring to fraudulent programming code or legal statutes that are misrepresented.

Computer Control System

Systems employing computer technology to manage, control, and automate processes, often used in industrial or manufacturing settings.

Ingredients

The components or elements that are combined to create a product, especially in cooking or manufacturing.

Fruit Of The Poisonous Tree

A legal metaphor in the United States that describes evidence that has been obtained illegally, which cannot be introduced in court.