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