An accounting method that requires the assets of the target firm to be reported at their fair market value on the books of the bidder is called the _______ method.

A) Purchase accounting.
B) Purchase reserve.
C) Pooling of interests.
D) Accounting reserve.
E) Goodwill accounting reserve.

Purchase Accounting

An accounting method used in mergers and acquisitions to consolidate the financial statements of the buying and acquired companies.

Fair Market Value

An estimate of the market value of an asset, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller in the market.

Assets

Resources with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.