One Weakness Associated with the Fair Value Enterprise Method Is

question 27

Multiple Choice

One weakness associated with the fair value enterprise method is that:

• A) it is inconsistent with the historical cost principle.
• B) non-controlling interest (NCI) is computed using the fair market values of the subsidiary's net assets.
• C) non-controlling interest (NCI) is computed using the book values of the subsidiary's net assets.
• D) the implied value based on the parent's acquisition cost may be unrealistic when the parent purchases significantly less than 100% of the subsidiary's voting shares.

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