Module 11 Flashcards
What determines how the accounting is done initially and subsequently for intercorporate investments?
level of control
a transaction or other event in which an acquirer obtains a controlling financial interest in one or more business is accounted for as a…
business combination
Investemtns in common stock that give the investor the ability to exercise signicant influence but not control are accounted for via the ….
equity method
What are three types of investments?
control, significant influence and passive
What is control?
Typically, majority voting interest
the acquirer measures the identifiable assets and assumed liabilities at their acquisition date ____
fair values
What is a reason to use fair value?
arms length exchange and removes built in unrecognized gains/losses
