Accounting Changes by the Financial Accounting Standards Board (FASB) in the US

question 27

Multiple Choice

Accounting changes by the Financial Accounting Standards Board (FASB) in the US:

• A) eliminated the "purchase method," allowing only the "pooling-of-interests" method for mergers and acquisitions
• B) eliminated the "pooling-of-interests" method, allowing only the "purchase method" for mergers and acquisitions
• C) allow for both the "purchase method" and the "pooling-of-interests" method for mergers and acquisitions
• D) none of the above

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Definitions:

Expected Monetary Value

A statistical technique to calculate the average outcome when the future includes scenarios that may or may not happen.

State of Nature Node

A decision analysis tool used to represent possible future events or outcomes in decision making under uncertainty.

State of Nature

A term used in decision theory and statistics to describe possible outcomes in a situation which are not under the control of the decision-maker.

Maximax Criterion

A decision-making strategy that seeks to maximize the maximum possible payoff, focusing on the most optimistic scenario.