Question: 1. Are there relevant circumstance differences between purchase and pooling of interests?
2. The logic of pooling rests heavily on the assumption that no substantive economic transaction occurs between the combiner and stockholders of the combine. Evaluate this assumption.
3. Why may companies not be indifferent to purchase and pooling accounting, and what do we know about this issue from research studies?
4. Why would proportionate consolidation result in rigid uniform for intercorporate equity investment accounting?