In a Business Combination the Revaluation of Non-Current Assets in the Records

question 24

Multiple Choice

In a business combination the revaluation of non-current assets in the records of the subsidiary means that the subsidiary has effectively adopted the:

• A)parent-entity model of consolidation
• B)proprietary model of accounting
• C)cost model of accounting
• D)revaluation model of accounting.

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Definitions:

Book Value

The value of an asset according to its balance sheet account balance, taking into account the cost of the asset less any depreciation, amortization, or impairment costs.

Fair Value

The financial return from selling an asset or the financial obligation to cover a liability in a transaction among market entities at the point of appraisal.

Goodwill

Goodwill is an intangible asset that arises when a business is purchased for more than the fair value of its net assets, representing elements of value such as brand reputation, customer relations, and intellectual property.

Fair Value

An estimate of the price at which an asset or liability could be exchanged between knowledgeable, willing parties in an arm's length transaction.