Final answer:
When an investment classified as held-to-maturity by an acquiree is recognized by the acquirer in a business combination, the acquirer does not automatically retain that classification. Instead, the acquirer reclassifies the investment based on its own accounting policies and the applicable accounting standards.
Step-by-step explanation:
The statement in the question is false. When an investment is classified as held-to-maturity (HTM) by an acquiree and the acquirer recognizes it in a business combination, the acquirer does not automatically retain the HTM classification. Instead, the acquirer reclassifies the investment based on its own accounting policies and the applicable accounting standards.
For example, according to the International Financial Reporting Standards (IFRS), the acquirer must reclassify the investment at fair value through profit or loss (FVPL) unless it meets certain criteria to be classified as HTM in the acquirer's own financial statements.
Therefore, the correct answer is b.False.