Consolidations Flashcards
Acquisition of an Affiliate’s Debt from Outside Party
the equivalent of retiring the obligation. immediately recognize any difference between the price paid and the carrying amount of the bonds as a gain or loss.
Consolidation of Majority-Owned Subsidiary Not Required
if control does not rest with the majority owner
Consolidation of Majority-Owned Subsidiary Required
even if they have “nonhomogeneous” operations, control is likely to be temporary (unless parent is a broker dealer), or there is a difference in fiscal periods.
Bond Issue Costs
The costs to register and issue debt or equity securities
Acquisition Related Costs
costs the acquirer incurs to effect a business combination.
Acquisition Related Costs Reporting
expenses in the periods in which the costs are incurred and the services are received.
Combined Financial Statements
prepared for a group of related companies or a group of commonly controlled companies.
Preparation of Combined Financial Statements
combining the individual companies’ financial statement classifications into one set of financial statements.
Acquisition Method
a consolidated balance sheet prepared immediately after the acquisition includes the assets of the subsidiary at their fair values.
The difference would be part of inventories.
Nonmonetary Transaction Accounting
If a parent deconsolidates a subsidiary through a nonreciprocal transfer to owners, such as a spinoff, they shall use nonmonetary transaction accounting guidance in reporting the transaction.
Variable Interest Entity
contractual, ownership, or other pecuniary interests in an entity that change with changes in the entity’s net asset value exclusive of variable interests.
Goodwill
The excess of the acquisition price over the fair value of the net identifiable assets acquired
