Acquisition Method: Part 2 (F4:M5)

Question 1

what is a non compete agreement considered?

Answer 1

an identifiable intangible asset

Question 2

how is NCI calculated under the “full goodwill method”?

Answer 2

FV of sub x NCI %

*GAAP

Question 3

how is NCI calculated under the “partial goodwill method”?

Answer 3

FV of sub’s net identifiable assets x NCI %

*IFRS

Question 4

when acquiring a subsidiary, how is in-process research and development recorded?

Answer 4

as an identifiable intangible asset

Question 5

how is goodwill calculated under the “full goodwill method”?

Answer 5

FV of sub - FV of sub’s net assets

Question 6

how is goodwill calculated under the “partial goodwill method”?

Answer 6

acquisition cost - FV of sub’s net assets acquired