An Organization Faces Many Challenges When Implementing an Environmental Accounting

question 117

Multiple Choice

An organization faces many challenges when implementing an environmental accounting (EMA) system. Which of the following inherent challenges must an organization overcome when the costs associated with hazardous materials disposal are combined with other overhead costs in its accounting system?

• A)Hidden cost
• B)Communication issue
• C)Newness of EMA
• D)Historical orientation of accounting

---

Definitions:

Push Down Accounting

An accounting method in which the financial statements of a subsidiary are adjusted to reflect the parent company's basis of assets, liabilities, and any goodwill created in the acquisition.

Negative Acquisition Differential

occurs when the sum of the fair values of identifiable net assets exceeds the cost of acquisition, leading to an immediate gain in the acquirer's financial statement.

Negative Goodwill

A financial situation where the purchase price of a company is less than the fair market value of its assets minus liabilities.

Acquisition Method

An accounting method used to account for business combinations, emphasizing the fair value of the acquired entity.