One Company Is Considering Entering into a Business Combination with Another

Multiple Choice

One company is considering entering into a business combination with another. The potential acquirer wishes to acquire the subsidiary's assets and liabilities but wishes to prepare Consolidated Financial Statements using the fair market values of its own assets and liabilities as well of those of its potential subsidiary. Can this be accomplished? (Assume that each of the methods is allowable)

A) Yes, this is permissible under the acquisition method.
B) Yes, this is permissible under the purchase method under certain circumstances.
C) Yes, this is permissible under the new-entity method.
D) No, this would not be possible under any circumstances.