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Asked by Bunmi Olaniyi on May 05, 2024

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Currently,mergers in Canada can be accounted for using either the purchase method or the pooling method.

Purchase Method

An accounting method for business combinations where the acquiring company records the assets and liabilities of the acquired company at their fair market values.

Pooling Method

An accounting technique used in mergers and acquisitions where the assets and liabilities of the merging companies are combined using their book values, rather than being re-valued or adjusted.

  • Comprehend the accounting methods for mergers and their impact on financial statements.
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MD
Marely DavilaMay 07, 2024
Final Answer :
False
Explanation :
As of the current standards, the pooling of interests method is no longer allowed for accounting for mergers in Canada. The Canadian accounting standards now require the use of the acquisition method (previously known as the purchase method) for business combinations.

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