FAR 4 - M4 ACQUISITION METHOD

Question 1

In a business consolidaton, if acquisition Cost is greater than the fair value of net assets acquired, which amount do you use to value the assets and liabilities?

Answer 1

FAir value

Question 2

How do you record registration fees for equity securities issued?

Answer 2

Decrease in APIC

Question 3

How do you record fees of finders and consultants?

Answer 3

Expensed

Question 4

How do you record registration fees for equity securities issued in a business combination/consolidation?

Answer 4

Decrease in APIC

Question 5

When acquiring a subsidiary, the parent company will

Answer 5

1. eliminate any interco revenue and expense items between the parent and subsidiary
2. report R/E of the parent only
3. when the parent does not acquire 100% of the subsidiry, the noncontrolling interest share of the sub must be recognized by the parent.