Which of the following is incorrect?
- Under acquisition accounting, direct acquisition costs are recorded by decreasing goodwill as a contra account.
- Under acquisition method accounting, indirect acquisition costs (such as expenses incurred by a firm”s permanent M&A department) are expensed.
- Security issue costs, such as brokerage fees, reduce the Excess Paid In Capital account (i.e., are recorded as a debit to that account).
- Accounting and consulting fees incurred in a business combination are expenses under the current standards for acquisitions.