Task: Which one of the following is a characteristic of a business combination that should be accounted for as an acquisition?
- The combination must involve the exchange of equity securities only.
- The transaction establishes an acquisition fair value basis for the company being acquired.
- The two companies may be about the same size, and it is difficult to determine the acquired company and the acquiring company.
- The transaction may be considered to be the uniting of the ownership interests of the companies involved.
- The acquired subsidiary must be smaller in size than the acquiring parent.