Which of the following statements about post-acquisition earnings is incorrect?
A) They form part of earnings of the economic entity.
B) They are the earnings produced subsequent to the acquisition date by members of the group.
C) They are eliminated against the parent's earnings, in a similar fashion to pre-acquisition earnings.
D) They form part of earnings of the economic entity and they are eliminated against the parent's earnings, in a similar fashion to pre-acquisition earnings.

Question

Quizplus · Accepted Answer

Post-acquisition earnings are not eliminated against the parent's earnings like pre-acquisition earnings. Instead, they are included in the consolidated financial statements as part of the group's earnings after the acquisition date.

Which of the Following Statements About Post-Acquisition Earnings Is Incorrect