During the current year, an entity acquires another entity in a transaction properly accounted for as a business acquisition. At the time of the acquisition, some of the information for valuing assets was incomplete. How should the acquirer account for the incomplete information in preparing its financial statements immediately after the acquisition? a. Record the uncertain items at a provisional amount measured at the date of acquisition. b. Record a contra account to the investment account for the amount involved c. Do not record the uncertain items until complete information is available d. Record the uncertain items at the carrying amount of the acquire
During the current year, an entity acquires another entity in a transaction properly accounted for as a business acquisition. At the time of the acquisition, some of the information for valuing assets was incomplete. How should the acquirer account for the incomplete information in preparing its financial statements immediately after the acquisition? a. Record the uncertain items at a provisional amount measured at the date of acquisition. b. Record a contra account to the investment account for the amount involved c. Do not record the uncertain items until complete information is available d. Record the uncertain items at the carrying amount of the acquire
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter16: Advanced Topics Concerning Complex Auditing Judgments
Section: Chapter Questions
Problem 21MCQ
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During the current year, an entity acquires another entity in a transaction properly accounted for as a business acquisition. At the time of the acquisition, some of the information for valuing assets was incomplete. How should the acquirer account for the incomplete information in preparing its financial statements immediately after the acquisition?
a. Record the uncertain items at a provisional amount measured at the date of acquisition.
b. Record a contra account to the investment account for the amount involved
c. Do not record the uncertain items until complete information is available
d. Record the uncertain items at the carrying amount of the acquire
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