Question

Long-term assets acquired in a business combination, which the acquirer classifies as held-for-sale at the acquisition date, should be measured at fair value.

a. True
b. False

Answer 1

Long-term assets acquired in a business combination, classified as held-for-sale at the acquisition date, should be measured at fair value less costs to sell.

Step-by-step explanation:

The statement is false. Long-term assets acquired in a business combination, which the acquirer classifies as held-for-sale at the acquisition date, should be measured at fair value less costs to sell rather than fair value. Fair value less costs to sell includes the estimated costs to sell or dispose of the asset. This is in accordance with the accounting guidance provided by the Financial Accounting Standards Board (FASB).