Which of the following statements about the Pooling of Interests Method is incorrect?
A)It ignores the fair market values of any shares issued in a business combination.
B)It is less complete than the Purchase Method due to the omission of any acquired assets and liabilities that were not recorded prior to the acquisition
C)Cash flows will always be significantly higher under the Pooling of Interests Method than under the Purchase Method)
D)Cash can never be exchanged under a Pooling of Interests business combination.

Question

Quizplus · Accepted Answer

The statement that cash flows will always be significantly higher under the Pooling of Interests Method than under the Purchase Method is incorrect. The cash flows may differ because the Pooling of Interests Method does not record certain assets and liabilities. However, the amount of cash flows will depend on the specific circumstances and may not always be significantly higher under the Pooling of Interests Method.

Which of the Following Statements About the Pooling of Interests