ACCO 420 Lecture Notes - Lecture 4: Equity Method, Financial Statement, Financial Instrument
15 Mar 2018
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Audit in the past, therefore aspe a constraint. Company counts on auditor to provide advice on accounting treatment. As the auditor we must ensure that the financial statements present fairly in accordance with aspe. Control has been acquired so will account for this as a business combination using the acquisition method. This is a direct acquisition of assets and liabilities and therefore there will be no consolidation. The assets and liabilities will be recorded in the books at the fair value. Disclosure necessary that a business combination occurred. 1 assuming that the cash was used to pay off the bonds. And the redemption price is the book value. The loss carried forward is only available to domtin and as such has 0 value to glomart on acquisition. As shown above, there is goodwill of ,000 to be recognized. Should look to see if there are any other identifiable net assets to allocate it to, otherwise will recognize as goodwill.
