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6 Cards in this Set
- Front
- Back
What is a Statutory Merger, and what does it imply for accounting purposes?
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A+B= A
Company B absorbed into A Company B ceases to exist Shares of B are retired Only A survives Accounting: assets/liabilities, no need to consolidate |
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What is a Statutory Consolidation, and what does it imply for accounting purposes?
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A+ B= C
New company C formed, absorbs A & B Co's A&B cease to exist A&B shares retired Only C survives Accounting: assets/liabilities, no need to consolidate |
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What is an Asset Acquisition, and what does it imply for accounting purposes?
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A+B= A or A+B= A+B
One co. acquires all or part of assets, liabs. and biz ops Selling co. may continue to survive or liquidate Accounting: assets/liabilities, no need to consolidate |
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What is a Stock Acquisition, and what does it imply for accounting purposes?
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A+B= P+S
One co. acquires most or all voting stock of another Both co's survive Acq. co is parent of acquired co., because it has controlling interest Accounting: Investment in subsidiary, consolidation |
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Acquisition cost is _______, and does not include ________
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Fair value of 1) assets, such as cash, transferred by the acquirer to the former owners of the acquiree
2) Liabilities incurred by the acquirer and owed to former owners of the acquiree 3) Stock issued by the acquirer to the former owners of the acquiree DOES NOT INCLUDE 1) Costs of registering and issuing securities (Charged against APIC) 2) Direct costs 3) Indirect costs 4) Contingent liability |
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Intangible assets involved in a merger are recognized when..
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1) Intangible asset arises from contractual or legal rights
2) Intangible asset is separable (eg. customer list) |