In a 1976 Discussion Memorandum, the FASB Defined the Pooling-Of-Interest

question 62

Multiple Choice

In a 1976 discussion memorandum, the FASB defined the pooling-of-interest method of accounting for business combinations as a method which:

• A) Results in the assets and liabilities of the subsidiary being valued at market value at the time of acquisition, and the parent's assets and liabilities being valued at book value.
• B) Results in the assets and liabilities of the parent being valued at market value at the time of acquisition, and the subsidiary's assets and liabilities being valued at book value.
• C) Results in all entities' assets and liabilities being revalued to market values at the time the combination originates.
• D) Uses the book values of the combining companies.

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Definitions:

Third-Party Payments

Transactions where a person or entity other than the direct participants (buyer and seller) undertakes to cover the cost or payment, commonly found in healthcare and insurance industries.

Medicare

A federal health insurance program in the United States primarily for people aged 65 and older, as well as for some younger people with disabilities.

Medicaid

A social health care program for families and individuals with low income and resources.

Medicare

A federal program providing health insurance to people over 65 and to certain younger people with disabilities, funded by payroll taxes, premiums, and the federal government.