BU487 Lecture Notes - Lecture 4: Retained Earnings
Document Summary
****intangible assets except goodwill in the books of subsidiary are included in bvna. When calculating book value net assets equate the subsidiary good will to 0. Fvna = bvna +/- fv(changes) (fv-bv) good will. Fvna = bvna +/- fv (changes) good will. Fvna = total assets total liabilities +/- fv (changes) - good will. Current liabilities = 36,000 36,000 = 0. Fvna = bvna + fv(changes) = 195,600 + 161,800 = 357,400. Gw = (328) + (328/0. 8 x 0. 2) 357,400 = 52,600. 328 comes from how much they paid to acquire the company. Parent company extension theory (pcet) = pc + (1-%ownership x fvna) fvna.
