A fundamental constraint used in reporting accounting information is conservatism, generally speaking, when a choice is...
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A fundamental constraint used in reporting accounting information is conservatism, generally speaking, when a choice is to be made the option that is least likely to overstate assets is the preferred option. Why then do we eliminate losses on intercompany transactions as well as the gains? In the intercompany transfer of depreciable assets, it is likely that the acquiring company may be making different use of the asset than did the seller. As such, the salvage value and/or the expected useful life of the asset may be changed. Is it appropriate for the acquirer to make these changes and redetermine depreciation? What impact does this have on the consolidation process? Briefly compare and contrast the NPV, Pl and IRR criteria. What are the advantages and disadvantages of using each of these methods? A fundamental constraint used in reporting accounting information is conservatism, generally speaking, when a choice is to be made the option that is least likely to overstate assets is the preferred option. Why then do we eliminate losses on intercompany transactions as well as the gains? In the intercompany transfer of depreciable assets, it is likely that the acquiring company may be making different use of the asset than did the seller. As such, the salvage value and/or the expected useful life of the asset may be changed. Is it appropriate for the acquirer to make these changes and redetermine depreciation? What impact does this have on the consolidation process? Briefly compare and contrast the NPV, Pl and IRR criteria. What are the advantages and disadvantages of using each of these methods?
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1 Ans InterCompany gain or misfortunes are killed while setting up the solidified books of records in light of the fact that the net impact of such exchange will be disposed of on union and books of r... View the full answer
Related Book For
Understanding Basic Statistics
ISBN: 978-1111827021
6th edition
Authors: Charles Henry Brase, Corrinne Pellillo Brase
Posted Date:
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