Under the Single-Date Method Goodwill Would Be Recognised

question 30

Multiple Choice

Under the single-date method goodwill would be recognised:

• A) at the point in time when the parent entity ultimately gains control of the subsidiary.
• B) at the time when each additional acquisition of shares is made.
• C) as part of equity in the parent's books.
• D) at the point in time when the subsidiary shareholders acknowledge that they will sell their shareholdings to the parent entity.

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Definitions:

Taxes

Compulsory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization.

Working Capital

The balance sheet accounts associated with day-to-day operating activities. Gross working capital is generally defined as current assets and net working capital as current assets minus current liabilities.

Accounts Receivable

Money owed to a company by its customers for goods or services already delivered but not yet paid for.

Inventory

Represents the goods or materials a business holds for the purpose of resale or production.