ACC 4100 Study Guide - Midterm Guide: Control Premium, Market Trend, Common Stock
21 Jul 2018
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For business combo for less than 100% ownership, acquirer recognizes and measures at acq date all of the following except: liabilities at book value. Report fair value of land at acquisition (even if u acquire 75%) Fv at acq- book value= excess goodwill. Fv at acq - book value * noncontrolling interest ownership. Methods used to value noncontrolling interest under circumstances where a control premium is applied to determine appripriate value for such interest includes. Valuation models based on sub discounted cash flows. Valuation models based on sub residual income projections. Not application of a safe harbor discount rate. Total amount of goodwill = fv of net asses - fv of 100% of floats stock based on purchase price. Fv of 100% of floats stock based on purchase price = common stock / % controlling ownership. Assets represented in consol balance sheet prepared at date of acq = fv of assets. Fair value over book value differences attributed to ci.
