General Principles In the 1990s, the pooling of interest method was a preferred method of accounting for consolidations by many managers because of the creation of instant earnings if the acquisition occurred late in the year. Can the firms that used pooling of interest in the 1990s continue to use the method for those earlier consolidations, or were they required to adopt the new standards for previous business combinations retroactively?
Answer to relevant QuestionsOverviewIf guidance for a transaction is not specifically addressed in the Codification, what is the appropriate procedure to follow in identifying the properaccounting?Cross-Reference The rules providing accounting guidance on subsequent events were originally listed in FASB Statement No. 165. Where is this information located in the Codification? List all the topics and subtopics in the ...On January 1, 2012, Pruitt Company issued 30,000 shares of its $2 par value common stock for the net assets of Shah Company in a statutory merger accounted for as a purchase. Pruitt’s common stock had a fair value of $28 ...What effect do subsidiary treasury stock holdings have at the time the subsidiary is acquired? How should the treasury stock be treated on consolidated workpapers?Pool Company purchased 90% of the outstanding common stock of Spruce Company on December 31, 2011, for cash. At that time the balance sheet of Spruce Company was as follows:Current assets............. $1,050,000Plant and ...
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