is an advanced accounting discussion prompt. I don’t want a fancy
answer I just want an answer that hits the main points WITHOUT making
me look to smart. Here is the prompt 1. Question and prompt 2.
fundamental constraint used in reporting accounting information is
conservatism, generally speaking, when a choice is to be made the
option that is least likely to overstate assets is the preferred
option. Why then do we eliminate losses on intercompany transactions
as well as the gains?
the intercompany transfer of depreciable assets, it is likely that
the acquiring company may be making different use of the asset than
did the seller. As such, the salvage value and/or the expected useful
life of the asset may be changed. Is it appropriate for the acquirer
to make these changes and redetermine depreciation? What impact does
this have on the consolidation process?
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