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Session 7-<100% Acquisitions

Session 7-<100% Acquisitions. Revised PCI analysis G/L entries on the parent’s books Consolidation w/s entries Consideration bases. Consideration Bases. FV CI + FV NCI Same rules for GW and Bargain Purchase Gain FV NCI valuation Active trading value of S

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Session 7-<100% Acquisitions

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  1. Session 7-<100% Acquisitions • Revised PCI analysis • G/L entries on the parent’s books • Consolidation w/s entries • Consideration bases Advanced Accounting-Spring 2012

  2. Consideration Bases • FVCI + FVNCI • Same rules for GW and Bargain Purchase Gain • FVNCI valuation • Active trading value of S • CI payment if S is not actively traded Advanced Accounting-Spring 2012

  3. Parent Co. Invest. Analysis Update Advanced Accounting-Spring 2012

  4. Entries on Parent’s G/L • S Co. earnings or loss • S Co. dividends • Parent portion of excess amortization Advanced Accounting-Spring 2012

  5. Consolidation Entries on W/S • See Parrot Company worksheet: • Entry S: Basic subsidiary S/E elimination • Entry A: FV alloc. @ beg. of year • Entry P: Intracompany rec/pay elimination • Entry I: Intracompany income elimination • Entry D: Intracompany dividend elimination • Entry E: Excess allocation expense recognition • Entry N: NCI current year activity • Other factors • Accumulated depreciation balance at acquisition elimination Advanced Accounting-Spring 2012

  6. Goodwill Allocation • Determine respective share of identifiable assets • Allocate goodwill first to CI Advanced Accounting-Spring 2012

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