When Are Parent Companies Allowed to Comprehensively Revalue the Assets

question 44

Multiple Choice

When are parent companies allowed to comprehensively revalue the assets and liabilities of a subsidiary to their fair values at the acquisition date through the use of push-down accounting, following a business combination?

• A) When reporting under ASPE and there is a significant non-controlling interest
• B) When reporting under ASPE and there is an insignificant (or no) non-controlling interest
• C) When reporting under IFRS and there is a significant non-controlling interest
• D) When reporting under IFRS and there is an insignificant (or no) non-controlling interest

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Definitions:

Lucrative Market

A market segment in which a company can generate substantial profits due to high demand or superior positioning.

International Trade

The exchange of goods and services between countries, which can involve imports, exports, and the balance of trade.

Economic Growth

An increase in the production of goods and services in an economy over a period, leading to a rise in the country’s wealth.

Dumping

The practice of selling a product in a foreign market at a price that is below the cost of production or lower than the price in the home market.