When Company X purchases Company Y,X should record Y's assets at their fair value at the time of the acquisition.

Question

Quizplus · Accepted Answer

This is a requirement under Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) when one company acquires another. The assets of the acquired company must be recorded at their fair value at the time of the acquisition to provide a more accurate reflection of the economic value of the acquisition.

When Company X Purchases Company Y,X Should Record Y's Assets