Accounting Answer 2022

0Running head:
Accounting
Name of the student
Name of the university
Student ID
Author note

1ACCOUNTING
Table of Contents
Answer 2..........................................................................................................................................2
Answer 3..........................................................................................................................................2
Answer 4..........................................................................................................................................3
Answer 5..........................................................................................................................................3
Answer 6..........................................................................................................................................4
Reference.........................................................................................................................................5

2ACCOUNTING
Answer 1
After summarizing the case, the key financial ratio that are likely to be affected by the
adoption of FAS 141R and FAS 160 (Yang, Poon & Lee, 2018) are leverage ratio, which further
means “debt to asset” and “debt to equity ratio”. This is very clear that the adoption of this two
concepts FAS 141R and FAS 160 affect to this particular ratio. Here it is reframed in the
financial statements that all assets and liabilities are revalued to fair market value at the
acquisition date. It will affect while the value of assets are overvalued and since they are valued
at a full market value. Acquiring the assets is recognized is an expenses of the company.
According to the new standards, the cost of acquiring assets will be charged as expenses and as a
result it happens an income to decline. Thus for the company to meet its targeted profits. Then
the acquisition strategy set earlier would have to change to avoid impacting its growth
negatively.
Answer 2
The FASB studied these accounting standards to represent economic events more loyally and
to follow FASB’s goal of convergence with the international accounting standards. FAS 160
(Wen & Moehrle, 2016) changes thew non-controlling interest. As per the old method the
“controlling interest” is recognized at rational value, while remaining “non-controlling interest”
charged as its carrying value, but the new method says acquired less than 100% controlling
interest and 100% of the acquired net assets are verified at Fair Value. Therefore, in previous
method, company is referring a partial acquisition where the controlling interest is acquired.
Since there is a gap between controlling interest which is charged as fair value and non