[Meadows30]

If one company is acquiring 100% of another company, what would the journal entries look like? For example, if it’s 100% acquisition, you do not debit investment in investee right? You would debit PP&E/Inventory etc.? What would the credits look like?

Reg 11/26/2012 80
BEC 01/05/2012
Audit
FAR

[Anonymous]

i think the credit would be what youre paying for it ie cash, or property given up?

[Anonymous]

i think the credit would be what youre paying for it ie cash, or property given up?

[zieba]

I believe you still have to zero out the equity and reset book to fair value, credit goodwill, etc?

On one hand you should have your investment at acquisition cost, and non-control share (if any), and vis-a-vis you zero out their common, APIC, retrained earnings, record intangibles at FV adjust assets record at book to FV, and record goodwill for the difference.

DR: goodwill (GAAP full, IFRS partial)

DR: intangibles

DR: adjustment of assets at book to FV at time of acquisition

DR: book value of assets acquired

CR: . investment in investee

CR: . non-controlling interest

Right, wrong or indifferent, you think they'd ask this on my FAR exam, but no.

AUD - 75*, 88 done 5/14! (*exp)
BEC - 74 , 77
REG - 65 , 76 (10 point combooo!!)
FAR - 69 , 75

Dr: perseverance
Dr: intelligence
Dr: luck
. Cr: . advisory score

[zieba]

I believe you still have to zero out the equity and reset book to fair value, credit goodwill, etc?

On one hand you should have your investment at acquisition cost, and non-control share (if any), and vis-a-vis you zero out their common, APIC, retrained earnings, record intangibles at FV adjust assets record at book to FV, and record goodwill for the difference.

DR: goodwill (GAAP full, IFRS partial)

DR: intangibles

DR: adjustment of assets at book to FV at time of acquisition

DR: book value of assets acquired

CR: . investment in investee

CR: . non-controlling interest

Right, wrong or indifferent, you think they'd ask this on my FAR exam, but no.

AUD - 75*, 88 done 5/14! (*exp)
BEC - 74 , 77
REG - 65 , 76 (10 point combooo!!)
FAR - 69 , 75

Dr: perseverance
Dr: intelligence
Dr: luck
. Cr: . advisory score

[Anonymous]

You simply debit the fair value of the assets acquired and credit the liabilities you are assuming as if you were just purchasing everything from them and assuming their liabilities. The excess of the fair value over the amount paid for the company is goodwill.

The investment account is normally not associated with a 100% consolidation. It is associated more with the equity method of having significant influence 20%-50%, or just accounting for an investment with less than 20% interest. Hopefully I am remembering right!

[Anonymous]

You simply debit the fair value of the assets acquired and credit the liabilities you are assuming as if you were just purchasing everything from them and assuming their liabilities. The excess of the fair value over the amount paid for the company is goodwill.

The investment account is normally not associated with a 100% consolidation. It is associated more with the equity method of having significant influence 20%-50%, or just accounting for an investment with less than 20% interest. Hopefully I am remembering right!

[Anonymous]

From Becker, CAR IN BIG.

Debit:

Common stock

APIC

Retained Earnings

Credit:

Investment in Investee (or cash I believe upon the purchase)

Non-controlling interest

Debit:

Book Value Adjustments (adjust assets to FMV)

Identifiable Intangibles

Goodwill-DR or Gain-CR

[Anonymous]

From Becker, CAR IN BIG.

Debit:

Common stock

APIC

Retained Earnings

Credit:

Investment in Investee (or cash I believe upon the purchase)

Non-controlling interest

Debit:

Book Value Adjustments (adjust assets to FMV)

Identifiable Intangibles

Goodwill-DR or Gain-CR

[Author]

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