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Flashcards in BUSINESS COMBINATION Deck (7)
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1

BUSINESS ACQUISITION JOURNAL ENTRIES
100% acquisition
with costs of registering and issuance
and other expenses

Investment 3,400
CS 2,000
APIC-CS 1,320 - reg/issuance
Cash 80 - cash paid for
reg/issuance

Registration and issuance expenses are netted against APIC.

For the other expenses - this is expenses as incurred

2

Non controlling interest ending balance computation - quick format

FV of non controlling interest beginning or
at acquisition by parent
+ share of net income
- share of dividends
non controlling interest ending balance at consolidation

beginning
+ (NI-dividends) x NC interest
ending balance

3

Combined financial statements

just add income of both companies
deduct any intercompany transactions
example: sale - deduct total amount as if the sale did not happen

4

Receivables in consolidated financial statements

Only eliminate receivables from subsidiaries - those which are 51% owned

5

Treatment of direct costs upon acquisition

expensed outright

6

Treatment of registration and issuance costs

reduction of APIC

7

Treatment of general expenses upon acquisition

EXPENSED AS INCURRED