Investments + Consolidation

Question 1

under what condition the parent company has not to consolidate with its owned subsidiary ?

Answer 1

1-The subsidiary is filed for bankruptcy

2-The subsidiary is under legal reorganization

Question 2

How the acquisition price determined ?

Answer 2

The acquisition price is calculated as fair value of total proceeds payed or received on the transaction price.

If payment will be in common stock not cash so the acquisition price is calculated using stock price at transaction closing date not transaction date.

Fair Value = Acquisition price = Investment in subsidiary