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Intercorporate Inv: Current Assets (Schweser vs CFA)
I'm looking at the Mock 2010 FSA Merck Manufacturing Vignette
#32
After the acquisition, the current ratio would be lowest under which method. The answer is equity method. Pretty routine stuff.
Note:
equity method current assets is just parent's assets
prop consolidation current assets is parent's + 50% subsidiary
consolidation current assets is combined current current assets
I understand that
Now, I am looking at Schweser Sample exam (not sure which one) FSA: "Valley Airlines"
#97: The balance of Valley's current assets, using the consolidation method is:
The combined current assets of both companies MINUS THE PURCHASE PRICE
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In the CFA mock exam they DID NOT SUBTRACT THE PURCHASE PRICE TO COMPUTE THE CURRENT ASSETS
BUT UNDER SCHWESER THEY SUBTRACTED THE PURCHASE PRICE TO COMPUTE CURRENT ASSETS UNDER CONSOLIDATION
WHICH IS CORRECT? |
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发表于 2011-7-13 16:35
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