Statement of Consolidated F/S Flashcards
what accounts are combined in a consolidated F/S?
assets and liabilities
what accounts are eliminated in a consolidated F/S?
parent investment account and subsidiary equity AND
intercompany transactions
what are the 4 steps of the acquisition method?
- identify the acquirer
- determine the acquisition date
- recognize and measure identifiable assets, liabilities and any noncontrolling interest
- recognize and measure goodwill or bargain purchase gain
what is goodwill?
business purchase price + NCI FV - fair value of net assets
what is the acquired company’s net identifiable assets?
fair value - carrying value
goodwill is recognized only when…
business combination or purchase occurs
TRUE OR FALSE
on the acquisition date, NCI is recognized at FV and added to the investment’s purchase price when determining the amount of goodwill
TRUE
if the parent company owns either directly or indirect majority (more than 50%) of the outstanding voting stock of a subsidiary, they present….
consolidated F/S
the portion of the subsidiary’s equity that is __________ is the _____________________, reported in the ________ section
not eliminated; noncontroling interest; SE
consolidated stockholders equity = ?
parent equity + noncontrolling interest
TRUE OR FALSE
in a business combination, assets and liabilities of the acquiree are purchased at FMV
True
TRUE OR FLASE
book value of net assets purchased and noncontrolling interestings is determined before calculating FMV
True
TRUE OR FALSE
consolidated statements includes the parent company and all of its subsidiaries (regardless to industry or foreign vs domestic)
TRUE
when parent incurs costs on behalf of publicly held subsidiary and does not charge for those costs, F/S must appropriately reflect the costs incurred, otherwise ……..
NI will be misstated
what does a non-controlling interest reveal about the subsidiary?
the subsidiary has public shareholders
