Select the incorrect statement from the following:
A)The financial statements for a 100% asset acquisition will be different from the consolidated financial statements for a 100% stock acquisition.
B)Business combinations usually, but not always, transfer ownership of the acquired business entity from one stockholder group to another.
C)Purchased assets are recorded at their current value to the purchaser, without regard to their recorded value to the seller.
D)The excess of acquisition cost over the current value of the investee's identifiable net assets is recorded as goodwill.

Question

Quizplus · Accepted Answer

In both a 100% asset acquisition and a 100% stock acquisition where the entities are consolidated, the financial statements will reflect the assets and operations of the acquired company in a similar manner. The primary difference lies in the acquisition process and the legal form rather than the accounting treatment post-acquisition.

Select the Incorrect Statement from the Following