Which of the following statements is correct? A) Under the New Entity Method, both of the company's net assets are recorded at their fair market values for these assets on the date of acquisition. B) Under the Acquisition Method, the acquirer company's net assets are recorded at the price paid for the assets on the date of acquisition. C) As of January 1^st, 2011, the New Entity Method must be used to account for business combinations where an acquirer can be identified. D)The Acquisition Method is consistent with the historical cost principle while the New Entity Method is not.

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements is correct? A) Under the New Entity Method, both of the company's net assets are recorded at their fair market values for these assets on the date of acquisition. B) Under the Acquisition Method, the acquirer company's net assets are recorded at the price paid for the assets on the date of acquisition. C) As of January 1^st, 2011, the New Entity Method must be used to account for business combinations where an acquirer can be identified. D)The Acquisition Method is consistent with the historical cost principle while the New Entity Method is not.

Which of the Following Statements Is Correct