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

1 months 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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Stephaine

10 days ago

D) any direct costs of the acquisition

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Cory

14 days ago

C) the fair value of any expenses

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Malcolm

15 days ago

B) the fair value of other assets distributed

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Pearline

18 days ago

A) any cash payment

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Hermila

1 months 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

1 months 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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Marylin

15 days ago

I agree, C is definitely the right answer. They can't include the fair value of expenses in the initial acquisition.

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Vicente

1 months 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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Izetta

4 days ago

C) the fair value of any expenses

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Carmen

14 days ago

B) the fair value of other assets distributed

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Beth

1 months 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

1 months ago

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

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Apolonia

1 months ago

Good to know. Thanks for clarifying!

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Monte

1 months ago

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

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Celia

1 months 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

2 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

2 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

3 months ago

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

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