In a Situation Where the Net Assets Acquired in the Controlled

question 39

Multiple Choice

In a situation where the net assets acquired in the controlled entity are not recorded at fair value,approaches that may be taken to account for this include:

• A) Adjust the excess or goodwill so that the elimination entry balances.
• B) Revalue the assets in the parent entity's books.
• C) Revalue the assets during the consolidation process each period.
• D) Adjust the depreciation on the assets to bring them to fair value in the consolidated accounts.
• E) None of the given answers.

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Definitions:

Consideration

Consideration in a legal context refers to something of value that is exchanged between parties as part of a contract, necessary for the contract to be legally binding.

Chinese Law

A legal system derived from civil law, heavily influenced by Soviet Socialist law, that governs the People's Republic of China.

Minors

Individuals under the legal age of majority, typically under 18 years old, not yet granted the full legal rights of an adult.

Contracts

Legal agreements between two or more parties that create mutual obligations enforceable by law.