There are a number of possible approaches to reporting consolidated financial statements after one company acquires control over another. Which of the following methods reports the consolidated amounts by adding together the carrying values of the assets and liabilities of the parent and the subsidiary?
A)Pooling-of-interests method
B)Acquisition method
C)Purchase method
D)New entity method

Question

Quizplus · Accepted Answer

The pooling-of-interests method reports the consolidated amounts by adding together the carrying values of the assets and liabilities of the parent and the subsidiary. This method was widely used in the past but is now less common due to changes in accounting standards. The acquisition method and purchase method are more commonly used today and require fair value adjustments and goodwill calculations. The new entity method is not a recognized method for reporting consolidated financial statements.

There Are a Number of Possible Approaches to Reporting Consolidated