A business combination is defined as:
A)A transaction in which an acquirer obtains control of an acquiree
B)A transaction in which one entity obtains control of one or more other entities
C)A transaction or other event in which an acquirer obtains control of one or more businesses
D)A transaction or other event in which an entity obtains control of one or more businesses

Question

Quizplus · Accepted Answer

According to the Financial Accounting Standards Board (FASB), a business combination is "a transaction or other event in which an acquirer obtains control of one or more businesses." Therefore, choice C is the most accurate option. Choice A is incorrect because it only refers to the acquirer and acquiree, whereas a business combination can involve multiple businesses. Choice B is also incorrect because it does not specify that the transaction has to result in control. Choice D is incorrect because it includes the term "entity," which could refer to non-business entities as well.

A Business Combination Is Defined As