Which of the following is recommended as the preferred accounting treatment for excess on acquisition?
A) Reduce proportionately the fair values of the non-monetary assets acquired until the excess is eliminated
B) Reduce proportionately the fair values of the monetary assets acquired until the excess is eliminated
C) Treat it as a deferred credit in the balance sheet and periodically allocate it as income
D) Immediately recognise the excess on acquisition as income in the income statement

Question

Quizplus · Accepted Answer

The preferred accounting treatment for excess on acquisition is to reduce proportionately the fair values of the non-monetary assets acquired until the excess is eliminated, as this aligns with the principles of fair value accounting.

Which of the Following Is Recommended as the Preferred Accounting