hich of the following is true about the measurement period allowed by GAAP? a. T
ID: 2331769 • Letter: H
Question
hich of the following is true about the measurement period allowed by GAAP? a. The measurement period is always one year from the date of acquisition of the b. The values of assets and liabilities of the acquiree are adjusted as a result of c. If the values of some assets or liabilities cannot be measured reliably on the date acquiree company changes in the business environment that occur during the measurement period. of acquisition, the acquirer should delay recording these assets or liabilities until their values can be estimated reliably. All of these statements are true None of these statements is true. d. e.Explanation / Answer
When the initial accounting for a business combination is not complete by the end of that reporting period, the acquirer reports provisional amounts for any incomplete items. During the measurement period, the acquirer then retrospectively adjusts those provisional amounts as it obtains the necessary information or, alternatively, determines that the necessary information will not be obtainable by the end of the measurement period.
Assets acquired, liabilities assumed, and non-controlling interests
Consideration transferred
If a business combination is achieved in stages, the equity interest in the acquiree previously held by the acquirer
The resulting goodwill recognized or the gain on a bargain purchase
Adjustment is made to above items
From the above information we can conclude that the answer is B) is correct
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