Net employee benefit liabilities acquired in a business combination are measured by using the:
A)present value method
B)estimated total of future cash outflows,undiscounted
C)face value of the liabilities
D)cash method.

Question

Quizplus · Accepted Answer

The present value method is the appropriate method for measuring net employee benefit liabilities acquired in a business combination. This method requires estimating the expected cash outflows and discounting them to their present value, which reflects the time value of money. This approach provides a more accurate picture of the liabilities and the financial impact on the acquirer. Therefore, option A is the best choice. B, C, and D are not suitable methods for measuring net employee benefit liabilities in a business combination.

Net Employee Benefit Liabilities Acquired in a Business Combination Are