Fair Value Method Equity Method

question 13

Multiple Choice

Fair Value Method Equity Method

• A)No Effect No Effect
• B)Decrease No Effect
• C)No Effect Decrease
• D)Increase Decrease

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Definitions:

Revaluation Surplus

An increase in the carrying amount of an asset, recognized in equity, when its fair value exceeds its carrying amount.

Pre-acquisition Entry

An accounting entry made to adjust the values of the acquirer's and acquiree's assets and liabilities to fair value at the acquisition date.

Non-current Assets

Assets held for long-term use in business operations, not expected to be converted into cash within the next year.

Bonus Dividends

Additional dividends paid to shareholders, above regular dividends, typically issued in the form of extra shares.