This questions is asking about acquisition cost, not how to account for these costs. The answer says “All of these costs are acquisition-related costs”, which is what the question is asking. Am I not understanding the question?
A combination is accounted for as an acquisition (initiated in a fiscal year beginning after December 15, 2008). Which of the following would be considered part of the acquisition cost of an acquired entity in a business combination?
l Costs incurred by the acquiring entity that are directly related to the acquisition
ll Costs incurred by the acquired entity that are directly related to the acquisition
lll Indirect acquisition costs incurred by the acquiring entity
A.I only
B.I and II only
C.I and III only
D.None of these items would be part of the acquisition cost.
Answer; D. FASB ASC 805-10-25-21 requires that acquisition-related costs be charged to expense. All of these costs are acquisition-related costs and should be expensed in the period incurred.
REG: 77 x2
BEC: 81 x3
FAR: 68 retake 10/1
AUD: 8/27
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