Which of the Following Is Not True Regarding a Subsidiary's

question 27

Multiple Choice

Which of the following is not true regarding a subsidiary's tax loss carryovers in an acquisition?

• A)​The resulting deferred tax asset should be considered when determining the amount of goodwill.
• B)​The parent will always be able to use a portion of the tax loss carryovers in the current period.
• C)​A valuation allowance should be provided if it is probable the benefit will not be used.
• D)​The resulting deferred tax asset should be separated into current and noncurrent components.

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Definitions:

Reduced Export Demand

A situation where there is a decline in the international demand for a country's goods or services, often affecting the exporting country's economy.

Crop Production

The process of growing and harvesting plants, particularly agricultural crops, for consumption, industry, and feed, involving techniques like planting, irrigation, and pest control.

Agricultural Price And Income Instability

Fluctuations in the prices and incomes in the agricultural sector due to variables like weather conditions, demand changes, and global market forces.

Overallocation Of Resources

A situation where resources are distributed in an inefficient manner, often leading to excess supply and wasted assets.