ACC 703 Chapter 4: Chapter 4 – Consolidation of Non-Wholly Owned Subsidiaries.pdf
30 Nov 2014
School
Department
Course
Professor
Document Summary
Chapter 4 consolidation of non- wholly owned subsidiaries. Based on cash flow, inflation rates, growth rates, discount rates, synergies, etc. Controlling interest usually has more goodwill since it paid a premium to obtain control. 61,600 net assets acquired (80/20) In textbook, use implied value of sub by dividing price paid for shares by percentage acquired. In textbook, assume entity theory is used in homework or demos. Cr gain on purchase of sub. Investment account will be valued at the parent"s share of the fv of identifiable net assets of sub. Contingent consideration negative goodwill for a non- wholly owned subsidiary: parent company extension theory must be used in situation involving. Changes in fv due to changes in circumstances should be recognized in earnings. Not remeasured after initial recognition. Recorded at fv and changes recognized in net income: deduct old goodwill when calculating: Implied value carrying amount old goodwill = ad.
