Save, a private limited company has acquired 100% of Kaye, a private limited company, on January 1, 2019. The fair value of the purchase consideration was P 10 million ordinary shares of P 1 of Save, and the fair value of the net assets acquired was P 7 million. At the time of the acquisition, the value of the ordinary shares of Save and net assets of Kaye were only provisionally determined. The value of the shares of Save and the net assets of Kaye on January 1, 2019 were finally determined on November 30, 2019 to be P 11 million and P5 million, respectively. However, the directors of Save have seen the value of the company decline since January 1, 2019, and as of February 2, 2020, wish to change the value of the purchase consideration to P 9 million. How much is the goodwill (gain) on combination? Save, a private limited company has acquired 100% of Kaye, a private limited company, on January 1, 2019. The fair value of the purchase consideration was P 10 million ordinary shares of P 1 of Save, and the fair value of the net assets acquired was P 7 million. At the time of the acquisition, the value of the ordinary shares of Save and net assets of Kaye were only provisionally determined. The value of the shares of Save and the net assets of Kaye on January 1, 2019 were finally determined on November 30, 2019 to be P 11 million and P5 million, respectively. However, the directors of Save have seen the value of the company decline since January 1, 2019, and as of February 2, 2020, wish to change the value of the purchase consideration to P 9 million. How much is the goodwill (gain) on combination?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Save, a private limited company has acquired 100% of Kaye, a private limited company, on January 1, 2019. The fair value of the purchase consideration was P 10 million ordinary shares of P 1 of Save, and the fair value of the net assets acquired was P 7 million. At the time of the acquisition, the value of the ordinary shares of Save and net assets of Kaye were only provisionally determined. The value of the shares of Save and the net assets of Kaye on January 1, 2019 were finally determined on November 30, 2019 to be P 11 million and P5 million, respectively. However, the directors of Save have seen the value of the company decline since January 1, 2019, and as of February 2, 2020, wish to change the value of the purchase consideration to P 9 million.

How much is the goodwill (gain) on combination?

Save, a private limited company has acquired 100% of Kaye, a private limited company, on January 1, 2019. The fair value of the purchase consideration was P 10 million ordinary shares of P 1 of Save, and the fair value of the net assets acquired was P 7 million. At the time of the acquisition, the value of the ordinary shares of Save and net assets of Kaye were only provisionally determined. The value of the shares of Save and the net assets of Kaye on January 1, 2019 were finally determined on November 30, 2019 to be P 11 million and P5 million, respectively. However, the directors of Save have seen the value of the company decline since January 1, 2019, and as of February 2, 2020, wish to change the value of the purchase consideration to P 9 million.

How much is the goodwill (gain) on combination?

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