SOFE Exam AFE Topic 2 Question 61 Discussion

Actual exam question for SOFE's AFE exam

Question #: 61
Topic #: 2

[All AFE Questions]

Which of the following is NOT included when initial acquisition of Subsidiary, Controlled and Affiliated Entities (SCA) is recorded as the sum of?

Aany cash payment

Bthe fair value of other assets distributed

Cthe fair value of any expenses

Dany direct costs of the acquisition

Show Suggested Answer

Suggested Answer: D

by Cathrine at Aug 08, 2023, 11:46 PM

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Edwin

17 days ago

Wait, are we talking about the fair value of my coffee expenses during the acquisition negotiations? Because that's non-negotiable, my friend.

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Pearline

2 days ago

A) any cash payment

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Hermila

22 days ago

I've got it! The correct answer is C. Who puts the fair value of expenses in the initial acquisition recording? That's just silly.

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Rikki

23 days ago

Haha, the fair value of expenses? What, are they trying to trick us? Definitely C is the right answer here.

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Vicente

28 days ago

Hmm, I thought all the costs associated with the acquisition would be included. This is tricky, I'll have to think about it more.

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Beth

19 days ago

A) any cash payment

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Iluminada

2 months ago

I'm pretty sure the correct answer is C) the fair value of any expenses. Acquisition costs are typically not included in the initial recording of the acquisition.

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Avery

22 days ago

Yes, that's correct. Expenses are typically not included in the initial sum of the acquisition.

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Apolonia

25 days ago

Good to know. Thanks for clarifying!

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Monte

26 days ago

Yes, that's correct. Those three items are typically included in the initial acquisition recording.

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Celia

28 days ago

So that means A) any cash payment, B) the fair value of other assets distributed, and D) any direct costs of the acquisition are included, right?

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Josefa

1 months ago

I think you're right, C) the fair value of any expenses is not included in the initial acquisition recording.

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Dewitt

1 months ago

I think you're right, C) the fair value of any expenses is not included in the initial acquisition recording.

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Felix

2 months ago

I'm not sure, but I think D) any direct costs of the acquisition is also not included in the initial acquisition cost.

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Marguerita

2 months ago

I agree with Beth, because expenses are not included in the initial acquisition cost.

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Beth

2 months ago

I think the answer is C) the fair value of any expenses.

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