Reading 40- LOS b ～ Q1 style, methods, business, following

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1.Which of the following methods of business combinations is the generally preferred method under International Accounting Standards (IAS)?

A)   Pooling method.

B)   Uniting of interests method.

C)   Proportional consolidation method.

D)   Purchase method.

 

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1.Which of the following methods of business combinations is the generally preferred method under International Accounting Standards (IAS)?

A)   Pooling method.

B)   Uniting of interests method.

C)   Proportional consolidation method.

D)   Purchase method.

The correct answer was D)

Pooling and uniting of interests are no longer widely used. Proportional consolidation is generally used for joint ventures. Note that IAS 22 requires the use of the purchase method of accounting.