ACC 455- Exam 2
The accounting method required under current GAAP for new business combinations is
the - Answer - acquisition method, unless specified criteria for the pooling method are
met
Total direct costs can include: - Answer - finders' fee and legal fees
An excess of fair value of identifiable net assets acquired in a business combination
over the price paid is reported as: - Answer - gain from bargain purchase
Goodwill impairment loss is the difference between - Answer - Goodwill and (FV of
division and FV net assets)
Obtain a controlling financial interest through: - Answer - -Direct ownership of greater
than 50% of common stock
-Indirect control of greater than 50% of common stock
-A variable interest entity for which parent is the primary beneficiary
Discounted operations require - Answer - intraperiod tax allocation
Under current GAAP, which method is required for inter period income tax allocation? -
Answer - The asset-liability method
Required disclosures for financial reporting of income taxes - Answer - The current and
deferred components of income tax expense or benefit attributable to continuing
operations
Required disclosures for financial reporting of income taxes - Answer - A reconciliation
using percentages or dollar amounts from the amount of income tax expense using
domestic federal statutory tax rate income tax expense using the entity's effective tax
rate
Required disclosures for financial reporting of income taxes - Answer - The total
valuation allowance recognized for deferred tax assets
Not required disclosures for financial reporting of income taxes - Answer - A year by
year schedule of each temporary difference that shows the timing of the reversals of
future taxable or deductible amounts
In a business combination accounted for using the acquisition method, the costs
registering and issuing equity securities as consideration transferred by the acquirer
should be accounted for as - Answer - A reduction from the fair value recorded as paid-
in capital for the securities issued
The accounting method required under current GAAP for new business combinations is
the - Answer - acquisition method, unless specified criteria for the pooling method are
met
Total direct costs can include: - Answer - finders' fee and legal fees
An excess of fair value of identifiable net assets acquired in a business combination
over the price paid is reported as: - Answer - gain from bargain purchase
Goodwill impairment loss is the difference between - Answer - Goodwill and (FV of
division and FV net assets)
Obtain a controlling financial interest through: - Answer - -Direct ownership of greater
than 50% of common stock
-Indirect control of greater than 50% of common stock
-A variable interest entity for which parent is the primary beneficiary
Discounted operations require - Answer - intraperiod tax allocation
Under current GAAP, which method is required for inter period income tax allocation? -
Answer - The asset-liability method
Required disclosures for financial reporting of income taxes - Answer - The current and
deferred components of income tax expense or benefit attributable to continuing
operations
Required disclosures for financial reporting of income taxes - Answer - A reconciliation
using percentages or dollar amounts from the amount of income tax expense using
domestic federal statutory tax rate income tax expense using the entity's effective tax
rate
Required disclosures for financial reporting of income taxes - Answer - The total
valuation allowance recognized for deferred tax assets
Not required disclosures for financial reporting of income taxes - Answer - A year by
year schedule of each temporary difference that shows the timing of the reversals of
future taxable or deductible amounts
In a business combination accounted for using the acquisition method, the costs
registering and issuing equity securities as consideration transferred by the acquirer
should be accounted for as - Answer - A reduction from the fair value recorded as paid-
in capital for the securities issued
