After the Introduction of the Fair Value Enterprise (FVE) Method

question 14

Essay

After the introduction of the Fair Value Enterprise (FVE) method in Canada, many companies opted to value the non-controlling interest in subsidiaries based on the fair value of the subsidiary's identifiable net assets at the acquisition date instead of valuing the non-controlling interest at its fair value. That is, they opted to use the Identifiable Net Assets (INA) method rather than the FVE method when preparing consolidated financial statements. What motivation might preparers of consolidated financial statements have that would cause them to have this preference?

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Definitions:

Street Corner Society

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William Foote Whyte

An American sociologist best known for his work in urban ethnography and studies of social organization.

Survey

A method of research involving the collection of data from a predefined group of respondents to gain information and insights on various topics of interest.

Going Native

A term used in anthropology to describe a researcher becoming overly involved and assimilated into the culture being studied, potentially biasing the findings.