Which of the following statements is correct? Choose only one. a) If the fair value of a business unit a firm acquired in the past has declined below the original acquisition price it paid, the new accounting standard that came into effect early 2020 would require the firm to estimate the fair values of individual assets for the goodwill impairment test. b) Firms that have a high volatility in profit margin over the business cycle can benefit from the LIFO method because it allows income-smoothing. c) The SEC requires the firms that use the LIFO method to disclose the LIFO layer liquidation, which is the difference in the values of inventories between the FIFO and LIFO assumptions. d) When a firms ownership in another firm exceeds 50%, the investor firm is deemed to have outright control and is required to use the equity method to report the effect of the ownership on its financial statements. e) None of the above..

1. Which of the following statements is correct? Choose only one.
a) If the fair value of a business unit a firm acquired in the past has declined below the original
acquisition price it paid, the new accounting standard that came into effect early 2020 would
require the firm to estimate the fair values of individual assets for the goodwill impairment test.
b) Firms that have a high volatility in profit margin over the business cycle can benefit from the
LIFO method because it allows income-smoothing.
c) The SEC requires the firms that use the LIFO method to disclose the LIFO layer liquidation,
which is the difference in the values of inventories between the FIFO and LIFO assumptions.
d) When a firms ownership in another firm exceeds 50%, the investor firm is deemed to have
outright control and is required to use the equity method to report the effect of the ownership on
its financial statements.
e) None of the above.