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Which of the following methods is not used to value a noncontrolling interest under circumstances where a control premium is applied to determine the appropriate value for such interest?

The application of a safe harbor discount rate

Which of the following statements is false regarding multiple acquisitions of a subsidiary's existing common stock?

The book value of the subsidiary will increase

Jax Company used the acquisition method when it acquired its investment in Saxton Company. Jax now sells some of its shares of Saxton such that neither control nor significant influence exists. Which of the following statements is true?

The difference between selling price and carrying value is recorded as a realized gain or loss

In comparing U.S. GAAP and International Financial Reporting Standards (IFRS) with regard to a basis for measurement of a noncontrolling interest, which of the following is true?

U.S. GAAP requires acquisition-date fair value measurement, but IFRS allows an option for acquisition-date fair value measurement.

Which of the following statements is true regarding the sale of subsidiary shares when using the acquisition method for accounting for business combinations?

If control continues, the difference between selling price and carrying value is recorded as an adjustment to additional paid-in capital.

When a parent uses the acquisition method for business combinations and sells shares of its subsidiary, which of the following statements is false?

If majority control is not maintained but significant influence exists, the equity method is still used to account for the investment and consolidated financial statements are still required.

In a step acquisition, which of the following statements is false?

Income from subsidiary is computed for the entire year for a new purchase acquired during the year

When a subsidiary is acquired sometime after the first day of the fiscal year, which of the following statements is true?

Income from subsidiary is recognized from date of acquisition to year-end.

For business combinations involving less than 100 percent ownership, the acquirer recognizes and measures all of the following at the acquisition date except:

Liabilities assumed, at book value

When a parent uses the initial value method throughout the year to account for its 80% investment in an acquired subsidiary, which of the following statements is true at the date immediately preceding the date on which adjustments are made on the consolidated worksheet?

Parent company dividends equal consolidated dividends

When a parent uses the equity method throughout the year to account for its 80% investment in an acquired subsidiary, which of the following statements is false at the date immediately preceding the date on which adjustments are made on the consolidated worksheet?

Parent company total assets equals consolidated total assets

When consolidating a subsidiary that was acquired on a date other than the first day of the fiscal year, which of the following statements is true of the subsidiary with respect to the presentation of consolidated financial statement information?

Pre-acquisition earnings are ignored in the consolidated income statement.

In measuring the noncontrolling interest immediately following the date of acquisition, which of the following would not be indicative of the value attributed to the noncontrolling interest?

book value of subsidiaries net assets

All of the following statements regarding the sale of subsidiary shares are true except which of the following?

the use of specific lifo assumption is acceptable