CFA Practice Question

There are 334 practice questions for this study session.

CFA Practice Question

Which of the following statements is false?
A. Goodwill is no longer amortized under both U.S. GAAP and IFRS.
B. The pooling method results in greater depreciation expense than the acquisition method.
C. The pooling method fails to reflect the acquisition cost on-balance sheet.
Explanation: Under pooling, assets are reported at the book value of the investee company, not at their fair market value, as is the case with the acquisition method.

User Contributed Comments 4

User Comment
ThePessimist Using the acquisition method, you'll generally have a mark-up in basis, and thus higher depreciation. Thus statement C is false.
ArekKlauza Pooling method is no longer part of the CFA curriculum. are we still supposed to know this stuff?
akirchner1 In regards to A. - Instead, goodwill is reviewed for impairment.
Calvinboca Under private company initiative, goodwill can be amortized...accounting curriculum could really use improvement
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