Question

the assets which is not considered under net asset method of calculation of purchase consideration is​

Answer 1

Explanation:

Under net asset method, the value of all assets are added and liabilities to be deducted from the total of the assets to find out the purchase consideration.

For this calculation, fictitious assets are not to be added.

Fictitious assets are those assets which are not represented by anything concrete or tangible. There are no tangible properties behind such assets. Preliminary expenses, prepaid expenses are the examples of fictitious assets.

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Answer 2

Answer:

The answer is Fictitious Assets.

Explanation:

• Fictitious Assets are those assets that do not have any physical existence. These are shown in the books of accounts as cash expenditures.
• These are the expenses that a company incurs but are shown as assets in the Balance Sheet because they are believed to give back returns after a period of time just like expenses of a business.
• Examples of Fictitious Assets are preliminary expenses, prepaid expenses etc.

Under net asset method, the value of all assets are added and liabilities are deducted from the total of the assets to find out the purchase consideration. And thus in this calculation Fictitious Assets are not added because these are intangible assets.