...Does Parent’s purchase of a legal subsidiary in bankruptcy qualify as a business combination under ASC 805? Parent lost its ability to remove and replace majority of the board of directors of Poor Son as a result of the bankruptcy. This supports that Parent lost control of its wholly owned subsidiary, Poor Son. Therefore, Parent’s acquisition of the reorganized Poor Son does not meet the scope exception in ASC 805-10-15-4(c). Under ASC 805-10-20, a business combination occurs when an acquirer obtains control of one or more businesses. The given facts state that Parent will receive 100% of the new equity interests in the re-organized Poor Son. In addition, Parent will have the power to name all members of Poor Son’s new board of directors. ASC 805-10-55-2 provides the examples of transactions in which an acquirer can obtain control of an acquired business. Based on ASC 805-10-55-2(c), Parent has control of the new reorganized Poor Son because it acquired 100% of equity interests of Poor Son. In addition, Parent has the majority of voting interests of Poor Son because it has the responsibility to appoint all new board of directors of Poor Son. According to ASC 810-10-15-8, an acquirer has the power to control if the acquirer has the ownership of a majority voting interests. Based on these, Parent has control of the reorganized Poor Son. To conclude, Parent’s acquisition of Poor Son in bankruptcy qualifies as a business...
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...1. How is goodwill measured in a business combination? ASC 805-30-30-1 Measurement of Goodwill Currently Viewing: 805 Business Combinations 30 Goodwill or Gain from Bargain Purchase, Including Consideration Transferred 30 Initial Measurement General > Measurement of Goodwill 30-1 The acquirer shall recognize goodwill as of the acquisition date, measured as the excess of (a) over (b): * a. The aggregate of the following: * 1. The consideration transferred measured in accordance with this Section, which generally requires acquisition-date fair value (see paragraph 805-30-30-7) * 2. The fair value of any noncontrolling interest in the acquiree * 3. In a business combination achieved in stages, the acquisition-date fair value of the acquirer’s previously held equity interest in the acquiree. * 30-2 In a business combination in which the acquirer and the acquiree (or its former owners) exchange only equity interests, the acquisition-date fair value of the acquiree’s equity interests may be more reliably measurable than the acquisition-date fair value of the acquirer’s equity interests. If so, the acquirer shall determine the amount of goodwill by using the acquisition-date fair value of the acquiree’s equity interests instead of the acquisition-date fair value of the equity interests transferred. * Currently Viewing: * 805 Business Combinations * 30 Goodwill or Gain from Bargain Purchase, Including Consideration...
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...Unit III - Consolidation Subsequent to Acquisition Date Key Concepts: Recording on the cost basis requires additional calculations of Ps net income and consolidated retained earnings Under the equity method, the Parent’s net income and retained earnings equals consolidated net income and consolidated retained earnings Preparation of consolidated statements – cost and equity methods - Exhibit 5.16, page 205 Impairment testing for intangible assets with definite useful lives: two step process (page 176): o step 1: is the asset impaired? o step 2: if so, calculate impairment loss as the difference between the recoverable amount f the asset and its carrying value Impairment testing for intangible assets with indefinite useful lives (example: goodwill): as singlestep process; i.e., if the recoverable amount is less than carrying value, asset is impaired by the difference – note that goodwill is no longer amortized but tested for impairment. Key Objectives: Prepare consolidated financial statements for the first and subsequent year ends after acquisition for a parent and its wholly owned (or non-wholly owned) subsidiary when the parent uses the cost method or the equity method. Resources Text pages 170 - 206 Practice Exercises within the unit iStudy Website Unit Assignment Before you begin your reading, review the key points, learning objectives and unit overview/notes. It is useful to keep the learning objectives in mind as you proceed through the...
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...Strategic investment: own more than an passive amount, not enough to control, has power to participate in financial and operational decision of investee IAS28. Classification require professional judgement. * Presentation of board of directors * Interco transaction and relationship * Who own the other shares * Any debt financing intermingled * Sharing technology and patent * Participation in policy making process Investor need to disclose share of investment income, * Also disc, opns * Error correction * Acct policy changes, * Capital transaction included amount in OCI Have influence or not : 20% Users and objectives 1. Public shareholder: a. investors are interested in the performance of the company b. owner: tony Antonio: the liquidation of the company, if its performing well and be able to generate profit. Ability to distribute dividend. 2. Government/CRA: due to the variety of the investment, if it records the investment recognize it properly. Prepare consolidated financial statement under necessary circumstance. Report the income tax and deferral properly. Constraints: 1. IFRS since it becomes public in 2005 Identify issues * Bach Burgers Inc: 80% which is more than passive amount, under IAS28, Teresa;Antonio’s wife has power to participate financial and operational decision. * One of the 12 board of directors * 20% of the shares is owned by other 11 directors...
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...BAC 3634 Corporate Accounting I Trimester 1 2015/2016 Group Assignment Topic: IFRS & IAS and The Practical Disclosure In Fraser & Neave Holdings Berhad Prepared for: Mdm. Haslin Binti Johari Prepared by: No. | Name | ID | 1 | Tan Se Man | 1102703355 | 2 | Wong Chin Ang | 1102703373 | 3 | Gan Hui Leng | 1102703420 | 4 | Neo Zi Sin | 1102703513 | 5 | Cheah Zhi Qin | 1112701231 | Table of Contents List of Diagrams I 1.0 Introduction 1 1.1 Economics of F&N Holdings Berhad 1 2.0 The Users of Financial Statements and Their Information Needs 4 3.0 Discussion of Standards Related to Consolidation and its Actual Presentation 6 4.0 Conclusion 14 Reference 16 List of Diagrams Exhibit 1 Group Structure & Summary of Ownership Interests in Subsidiary Exhibit 2(a) Disclosure of Ownership Interest in Subsidiaries Exhibit 2(b) Disclosure of Ownership Interest in Subsidiaries Exhibit 3 Consolidated and Separate SOPL Exhibit 4 Consolidated and Separate Statements of Comprehensive Income Exhibit 5(a) Consolidated SOFP Exhibit 5(b) Separate SOFP Exhibit 6 Consolidated SOCIE Exhibit 7 Separate SOCIE Exhibit 8 Consolidated and Separate SOCF Exhibit 9 Disclosure about Reporting Date Exhibit 10 Acquisition Method of Business Combinations Exhibit 11 Comparisons of Investment in Subsidiaries of 2 years Exhibit 12 Goodwill as Intangible Assets and Computations Exhibit 13(a) Goodwill Recognized...
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...------------------------------------------------- ACCT3050 ASSIGNMENT, CHAP 2 1. | Lisa Co. paid cash for all of the voting common stock of Victoria Corp. Victoria will continue to exist as a separate corporation. Entries for the consolidation of Lisa and Victoria would be recorded in: A. | A worksheet. | B. | Lisa's general journal. | C. | Victoria's general journal. | D. | Victoria's secret consolidation journal. | E. | The general journals of both companies. | | | | 2. | Using the acquisition method for a business combination, goodwill is generally defined as: A. | Cost of the investment less the subsidiary's book value at the beginning of the year. | B. | Cost of the investment less the subsidiary's book value at the acquisition date. | C. | Cost of the investment less the subsidiary's fair value at the beginning of the year. | D. | Cost of the investment less the subsidiary's fair value at acquisition date. | E. | None of the above; it is no longer allowed under federal law. | | | | 3. | How are direct and indirect costs accounted for when applying the acquisition method for a business combination? A. | Option A | B. | Option B | C. | Option C | D. | Option D | E. | Option E | | | | | | 4. | A statutory merger is a(n): A. | Business combination in which only one of the two companies continues to exist as a legal corporation. | B. | Business combination in which both...
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...Assignment 1: Business Combinations Cindy Yoon Professor Robert Neely ACC 401 – Advanced Accounting October 24, 2013 Abstract In this paper, I will provide an explanation for the business combination method I selected in expanding the corporation by acquiring another firm, the reason for selecting that business combination method, and how the purchase will grow the business. I will also analyze the accounting requirements for the business combination method I selected and how I determined goodwill was impaired and the financial impact of such impaired goodwill. The business combination method I selected is the acquisition method. Business combinations have implemented the newly created accounting treatment called the “acquisition method.” The major changes in the acquisition method include changes to fair value measurement, goodwill recognition, and non-controlling interests. In acquisition method, the parent company reports the net assets of the acquired company at the price that it was paid for. This price includes any cash payment, the fair market value of any shares issued, and the present value of any promises to pay cash in the future. A key point of the purchase method is that the parent consolidates the book value of all the subsidiary’s assets and liabilities and then the fair value, broken down between Net Book Value and Fair Market Value increments, of the subsidiary's assets and liabilities are added to the parent's own assets and liabilities...
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...(amortizable, impairment); Acquisition has contingent consideration (treated as part of consideration); in process R&D (treat as asset with unlimited life) * Chapter 3: VIE (multiple choice, not problem), computation of goodwill; E&R elimination entry; bargain purchase; previously recorded goodwill (ignore it) * Chapter 4: CERO, impairment testing (for intangibles, limited life and unlimited life, and goodwill) * Chapter 5: NCI; goodwill allocation; N elimination entry (for NCI); NCI with bargain purchase; cash flow statements (multiple choice) * Chapter 6: land (problem) * IFRS not on the exam! * Be careful, if asked what’s acquiring company’s journal entry, it’s equity method entry. (This is different from consolidation entries.) Do one more time: P1.4 P2.5 E4.3, 4.4, P4.6 P5-4, 5-5 E6.1 Review notes: * At the date of acquisition: only E & R needed. * The balance of treasury stock is Credit. (when there is TS, BV should decrease by this amount) * Gain on bargain purchase: total gain(=Acquisition cost+ NCI- FV of net assets) recorded by parent. (E5.4) * Gain on bargain purchase: in R, NCI should be adjusted to it’s fair value at the date f acquisition, so does investment account. (E5.4) * Step N: DR. NCI in net income of xx (similar to step C for controlling interest) CR. Dividend CR. NCI in xx * Summary of CERON (see handout of P5-5) * C&N has similar function: reverse Equity and investment accounts...
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...ACCT 595 Advanced Accounting Final Exam Answers https://homeworklance.com/downloads/acct-595-advanced-accounting-final-exam-answers/ ACCT 595 Advanced Accounting Final Exam Answers FINAL EXAM ADVANCED ACCOUNTING (30 questions x 9 points=270) 1. Gaw Company owns 15% of the common stock of Trace Corporation and used the fair-value method to account for this investment. Trace reported net income of $110,000 for 2011 and paid dividends of $60,000 on October 1, 2011. How much income should Gaw recognize on this investment in 2011? A. $16,500. B. $9,000. C. $25,500. D. $7,500. E. $50,000. 2. Yaro Company owns 30% of the common stock of Dew Co. and uses the equity method to account for the investment. During 2011, Dew reported income of $250,000 and paid dividends of $80,000. There is no amortization associated with the investment. During 2011, how much income should Yaro recognize related to this investment? A. $24,000. B. $75,000. C. $99,000. D. $51,000. E. $80,000. 3. On January 1, 2011, Pacer Company paid $1,920,000 for 60,000 shares of Lennon Co.’s voting common stock which represents a 45% investment. No allocation to goodwill or other specific account was made. Significant influence over Lennon was achieved by this acquisition. Lennon distributed a dividend of $2.50 per share during 2011 and reported net income of $670,000. What was the balance in the Investment in Lennon Co. account found in the financial records of Pacer as of December 31, 2011? ...
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...Service Agreement is entered into on the date shown below between US Loan Support (USLS) and Customer: USLS provides processing and support services to assist consumers who are applying for Federal Student Loan Consolidation Services through the Department of Education (DOE). USLS is a private company, not affiliated with any government agency, and for a fee USLS will assist in assembly and submission of student loan consolidation documents. USLS is not a lender, a law office or a debt consolidation company. Customer requests USLS to perform, in good faith, the following services, (“the Services”): 1. Perform a financial review of the Customer’s current situation, 2. Analyze and determine the applicability of potential Student Loan Consolidation options that may be available to Customer from the DOE, 3. Present and discuss the various options with Customer, 4. After an option has been determined, prepare, submit and process a Federal Student Loan Consolidation Application with the DOE, on the Customer’s behalf. 5. After completion of consolidation, USLS will to contact Customer monthly. In the event of a change of Customer circumstances or change in government programs USLS will assist client in reapplying if it benefits Customer. 6. Approximately one year from the consolidation USLS will work with Customer to reapply in an effort to make Customer’s payment as low as possible. IN CONSIDERATION of the promises and covenants of the parties to this Agreement, Customer and USLS hereby...
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.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Regional Accreditation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 State and International Licensures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Program Accreditation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 School of Business/Business Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 College of Health Professions: School of Nursing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 College of Education/Education Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 College of Social Sciences/Counseling Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....
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...inclusion or reinforce discrimination and exclusion Heronsbridge School has a motto that declares ‘together we can’. Each member of staff and pupil must trust in this motto to promote well-being. The school obeys numerous legislations set out by the local authority who also work with the school to certify the policies are relevant to the school setting and to the pupils it accommodates. By creating policies around the needs of the pupils and not just creating generic ones allows the school to ensure equality, diversity, inclusion, and discrimination is the primary concern. School policies are updated regularly to ensure the continuation of fair practice. Policies are available to...
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...A ten-item questionnaire containing various descriptions of school-related characteristic which have been found to adversely affect pupils academic performance was administered on 809 teachers and 1012 students of secondary schools from ten randomly selected states in Nigeria. The respondents ranked the characteristics in terms of their degree of effect on pupil academic performance. The result showed that lack of resource materials for teaching, instructional strategies, teacher shortages and teachers’ attitude to work were rated more highly than other characteristics. The result further showed that while the teachers considered lack of resource materials for teaching as having the greatest degree of effect on pupils academic performance, the students on the other hand considered poor instructional strategies as having the greatest degree of effect on pupil academic performance. INTRODUCTION AND BACKGROUND LITERATURE On attaining Independence status as a nation in 1960 what seemed a major concern to most Nigerian leaders then was how education would be accessible to all citizens of the newly created nation. Education was seen as the necessary instrument immediately and essentially for the consolidation of the independence, for securing the new nation against neocolonianism and for making workable the newly established self government in a multi-ethnic society. Mass education, at least to the level of literacy, was also seen by the Nigerian leaders to be necessary to create...
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...The Unity of “Banking” and “Problem-Posing” Education There is not a specific or perfect method to teaching. No holy grail, or special code that will unlock the key to perfect universal teaching. Minds are incredibly unique; they learn in an abundance of methods. Some by hands on learning, others by discussing concepts out loud or perhaps through reading and writing. In the opinion of Paulo Freire, there are two methods to education; the “banking” method in which he describes teachers who merely deposit information into their students as if they were vessels to be filled with the expectation that the information deposited will be returned in full. On the other end of the spectrum, Freire presents the problem-posing method, which Freire is...
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...Teachers as state agents are visibly responsible for the enactment of the educational policies as stated in the current Education Act 26.206 and all the related national and regional documents. Therefore, their role is pivotal to achieve the goals set in the current curricula within our education system by means of their educational practices and interaction with the learners, peers, and school authorities. As Rachel Throop (2007) argues: ‘Teachers are not passive recipients of language policy; rather, they play an instrumental role in classroom language policy (re)creation. All teachers, whether teaching mainstream or English Language Learner/ Bilingual Education (ELL/BLE) classrooms, are inevitably engaged in acts of language planning and policy each...
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