Under which set of circumstances would it not be appropriate to assume the value the noncontrolling shares is the same as the controlling shares?
A)The acquisition is for less than 100% of the subsidiary.
B)The fair value of the of the noncontrolling shares can be inferred from the value implied by the acquisition price.
C)Active market prices for shares not obtained by the acquirer imply a different value.
D)The amount of the "control premium" cannot be determined .

Question

Quizplus · Accepted Answer

When active market prices for shares not obtained by the acquirer imply a different value, it is not appropriate to assume that the value of noncontrolling shares is the same as controlling shares. In this case, the fair value of noncontrolling shares has to be determined based on market prices and other factors.

Under Which Set of Circumstances Would It Not Be Appropriate