Accounting for Acquisition

Question 1

Equipment or land basis at acquisition

Answer 1

Fair Value at the time of Acquisition

Question 2

What is the basis for Consolidation when a company buys another

Answer 2

Fair value of the consideration given up.

Question 3

If the Fair value of the consideration given up is not readily apparent

Answer 3

You use Fair Value of the shares obtained

Question 4

Direct Consolidation costs (Internal and External)

Answer 4

Expensed immediately

Accountant and Legal Fees, direct Consolidation costs

Question 5

Consolidation reporting:

Assets and Liabilities of the acquiring company

Subsidiary’s revenue and expenses

Answer 5

Assets and Liabilities = Fair Value

The Sub’s account is reported the period after acquisition

Question 6

Non Controlling Interest

Answer 6

Must be reported within Stockholders Equity