Question: Your answer is incorrect. Amazon purchased MGM for $8.45 billion and capitalized the fair value of its movie catalog. In the same period, the

Your answer is incorrect. Amazon purchased MGM for $8.45 billion and capitalized the fair value of its movie catalog. In the same period, the company expensed $11 billion spent on producing movies, TV shows, and music for Prime. The difference in this accounting treatment is due to O the acquisition of the movie catalog is not an arm's length transaction so the fair value of the movie catalog is uncertain. O the uncertainty about whether the $11 billion expenditure will produce positive future cash flows. O the movie catalog was purchased in connection with a business combination. O all of these reasons are correct.

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