To Measure a Company's Ability to Create Value After Paying

question 12

Multiple Choice

To measure a company's ability to create value after paying acquisition premiums,which of the following adjustments should be made?
I.Adjust reported goodwill upward to recapture historical amortization and impairments.
II.Adjust acquired intangibles upward to recapture historical amortization and impairments.
III.Add the hypothetical accrued interest of the notional goodwill principle.

• A)I and II only.
• B)II and III only.
• C)I and III only.
• D)I,II,and III only.

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Definitions:

Common Law

A legal system based on judicial decisions and precedents rather than statutory laws, common in many English-speaking countries.

Consideration

Something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.

Quantum Meruit

A legal principle meaning "as much as he has deserved," allowing a person to recover reasonable compensation for services or goods provided when no contract exists, or where a contract exists but precise amounts are not specified.

Relied Promise

This term does not correspond to standard legal or contractual terminology and may not be a real key term. NO.