With Respect to Recognizing and Measuring the Fair Value of a Business

question 56

Multiple Choice

With respect to recognizing and measuring the fair value of a business combination in accordance with the acquisition method of accounting, which of the following should the acquirer consider when determining fair value?

• A) Only assets received by the acquirer.
• B) Only consideration transferred by the acquirer.
• C) The consideration transferred by the acquirer and the fair value of assets received less liabilities assumed.
• D) The par value of stock transferred by the acquirer, and the book value of identifiable assets transferred by the entity acquired.
• E) The book value of identifiable assets transferred to the acquirer as part of the business combination less any liabilities assumed.

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Definitions:

General Agreement on Tariffs and Trade

An international trade treaty designed to boost economic recovery by reducing quotas and tariffs.

Free Trade Zones

Designated areas within a country where goods can be imported, handled, manufactured, and exported without direct intervention from customs authorities.

Mercosur

A South American trade bloc established to promote free trade and fluid movement of goods, people, and currency among its member countries.

Trans-Pacific Partnership

A trade agreement among multiple Pacific Rim countries aimed at deepening economic ties, reducing tariffs, and fostering trade to boost growth.