If a Business Combination Occurs and the Consideration Paid Exceeds

question 31

Multiple Choice

If a business combination occurs and the consideration paid exceeds the fair value of the identifiable net assets of the subsidiary on the acquisition date and the parent acquires less than 100% of the outstanding common shares of the subsidiary, which consolidation method will result in the highest value for non-controlling interest on the acquisition date?

• A) The proprietary theory.
• B) The parent company theory.
• C) The entity theory.
• D)The parent company extension theory.

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Definitions:

NOT Function

A logical operation that inverts its input; if the input is true, the output is false, and vice versa.

AND Function

A logical operation that returns true only if all the operands are true.

Boolean Equation

A mathematical expression using Boolean algebra, involving operators like AND, OR, NOT, representing logical relationships.