Which of the Following Is NOT Considered to Be Part

question 18

Multiple Choice

Which of the following is NOT considered to be part of the acquisition cost of a subsidiary?

• A) Any cash paid to the seller.
• B) The fair value of contingent consideration.
• C) Present value of any promises by the acquirer to pay cash in the future.
• D) The cost of issuing shares as part of the consideration.

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Definitions:

Positive Adjustment

An increase in the amount of reported income or expense, resulting in a higher taxable income.

AMTI

Alternative Minimum Taxable Income, which is calculated to ensure that taxpayers with large amounts of deductions, exemptions, and exclusions still pay a minimum amount of tax.

AMT Depreciation

Depreciation methods and rates that apply for the Alternative Minimum Tax, a parallel tax system to ensure certain taxpayers pay a minimum amount of tax.

Regular Tax Depreciation

A deduction that allows taxpayers to recover the cost of property used in a business or held for the production of income, computed under the regular tax system.