S1: In a business combination resulting a parent company-wholly owned subsidiary relationship, goodwill developed in the working paper elimination is attributed in its entirety to the parent. S2: On the date of business combination of a parent company and its partially owned subsidiary, under the computation method used in full goodwill method, the amount assigned to minority interest in nest assets of subsidiary is based on the cost of the parent company’s investment in the subsidiary’s common stock. A. Both statements are correct B. Only S1 is correct C. Only S2 is correct D. Both statements are incorrect
S1: In a business combination resulting a parent company-wholly owned subsidiary relationship, goodwill developed in the working paper elimination is attributed in its entirety to the parent. S2: On the date of business combination of a parent company and its partially owned subsidiary, under the computation method used in full goodwill method, the amount assigned to minority interest in nest assets of subsidiary is based on the cost of the parent company’s investment in the subsidiary’s common stock. A. Both statements are correct B. Only S1 is correct C. Only S2 is correct D. Both statements are incorrect
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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S1: In a business combination resulting a parent company-wholly owned
subsidiary relationship,
attributed in its entirety to the parent. S2: On the date of business combination
of a parent company and its partially owned subsidiary, under the computation
method used in full goodwill method, the amount assigned to minority interest in
nest assets of subsidiary is based on the cost of the parent company’s
investment in the subsidiary’s common stock.
A. Both statements are correct
B. Only S1 is correct
C. Only S2 is correct
D. Both statements are incorrect
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