How Are Stock Issuance Costs and Direct Combination Costs Treated

question 114

Multiple Choice

How are stock issuance costs and direct combination costs treated in a business combination which is accounted for as an acquisition when the subsidiary will retain its incorporation?

• A)Stock issuance costs are a part of the acquisition costs,and the direct combination costs are expensed.
• B)Direct combination costs are a part of the acquisition costs,and the stock issuance costs are a reduction to additional paid-in capital.
• C)Direct combination costs are expensed and stock issuance costs are a reduction to additional paid-in capital.
• D)Both are treated as part of the acquisition price.
• E)Both are treated as a reduction to additional paid-in capital.

---

Definitions:

Identity Development

The process through which individuals form, explore, and settle into their personal, social, and cultural identity or identities over their lifetime.

Intimate Partner Violence

Acts of violence or aggression by one partner against another within an intimate relationship.

Situational Couple Violence

A pattern of physical violence between partners that arises from a specific argument or situation, rather than stemming from a desire to control or dominate.

Emotional Violence

A form of abuse characterized by subjecting another to behavior that could cause psychological trauma, including anxiety, chronic depression, or post-traumatic stress.