Business combination Flashcards
1
Q
How should the acquirer recognize a bargain purchase in a business combination?
A
As a gain in earnings at the acquisition date
2
Q
What is a bargain purchase in a business combination or acquisition?
A
The net assets acquired exceed the purchase price
3
Q
If company A acquired company B at an acquisition price that exceeded the fair value of the net assets acquired, how would the amounts for plants, property, and equipment as well as long term debt be recorded?
A
It will be accounted for under the acquisition method
Assets recorded at fair value
Liabilities recorded at fair value
Excess of acquisition price over fair value = goodwill
