Which of the following statements pertaining to any acquisition differential arising from a joint venture is correct?
A) There can be no acquisition differential arising from the formation of a new joint Venture.
B) The acquisition differential arising from a newly formed joint venture is allocated across the venture's identifiable net assets.
C) The acquisition differential arising from a newly formed joint venture is immediately charged to the retained earnings of each venturer on a pro-rata basis.
D)An acquisition differential may arise when a venturer increases its ownership percentage of a joint venture.

Question

Quizplus · Accepted Answer

In the formation of a new joint venture, there is no acquisition differential because the joint venture is created from scratch, and there are no pre-existing net assets to allocate the differential to.

Which of the Following Statements Pertaining to Any Acquisition Differential