One company acquires another company in a combination accounted for under the acquisition method. The acquiring company decides to apply the initial value method in accounting for the combination. What is one reason the acquiring company might have made this decision?
A. When the initial method is used, no worksheet entries are required in the consolidation process.
B. Operating results on the parent's financial records reflect consolidated totals.
C. It is the only internal reporting method allowed by generally accepted accounting principles.
D. It is the only method allowed by the SEC.
E. It is relatively easy to apply.
Answer: E
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