With Respect to Business Combinations Resulting from Mergers and Acquisitions

question 40

Multiple Choice

With respect to business combinations resulting from mergers and acquisitions,

• A) British firms tend to use the purchase method, whereby assets are revalued to "fair values" at the date of acquisition.
• B) merger accounting (pooling of interests) requires that firms revalue assets to "fair value."
• C) the purchase method allows the acquiring firm to include prior years' profits from the acquired firm.
• D) the pooling of interests method is widely used outside of the United States, especially in Japan and other Asian countries.

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Definitions:

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Energized

The state of being filled with energy or electricity, used especially in contexts involving electrical power or personal physical and mental vitality.

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