The acquisitions method for consolidation requires that all assets and liabilities of the subsidiary are reported using 100% of fair values at the combination date.

Question

Quizplus · Accepted Answer

The statement is true. The acquisitions method requires the consolidation of all assets and liabilities of the subsidiary at their fair values at the date of combination. This includes any intangible assets, goodwill, and contingent liabilities. This approach provides a more accurate reflection of the value of the subsidiary and its impact on the parent company's financial statements.

The Acquisitions Method for Consolidation Requires That All Assets and Liabilities