question 21choose the correct answer from the choices An entity acquires a subsidiary exclusively with a view to selling it. The subsidiary meets thecriteria to be classified as held for sale. At the balance sheet date, the subsidiary has not yetbeen sold, and six months have passed since its acquisition. How will the subsidiary be valuedin the balance sheet at the date of the first financial statements after acquisition? *In accordance with applicable PFRSO At the lower of its cost and fair value less cost to sellO At fair valueO At carrying value

Investment in subsidiary held for sale is valued as per PFRS 5 - Non current assets held for sale…

Answered: - subsidiary be valued

Business

Accounting

- subsidiary be valued

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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TRUE OR FALSE: Indicate whether the statements are true or false. 1. Assuming the parent acquired 100 percent of the subsidiary’s stock and there are no purchase differentials, the investment income recorded by the parent in the current period will equal the subsidiary’s current net income recognized subsequent to the acquisition date. 2.
If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: REQUIREMENTS:A. GoodwillB. Consolidated Total Assets at the date of acquisitionC. Consolidated Total Liabilities at the date of acquisitionD. Consolidated Equity at the date of acquisition
Which of the following statements regarding the acquisition method of accounting for business combinations is/are correct? (i) It is applied only when the acquirer purchases 100% of the share capital of the acquiree (ii) It requires calculating goodwill (iii) It is applied at every balance sheet date subsequent to the date of acquisition
1. At the date of an acquisition which resulted to either goodwill or gain on bargain purchase, the acquisition method: A. Consolidates the subsidiary's assets and liabilities at book value. B. Consolidates the subisdiary's assets at fair value and libailities at book value. C. Consolidates the subsidiary's assets at book value and liabilities at fair value. D. Consolidates the subsidiary's assets and liabilities at fair value. 2. The consideration transferred in a business combination will most likely include which of the following? A. The transaction price in an arrangement that is primarily for the benefit of the acquirer or the combined entity. B. A contingent liability with an acquisition-date fair value but imposes an improbable outflow that the acquirer assumes in a business combination. C. The "off-market" value of a reacquired right. D. The acquisition-date fair value of a contingent consideration that is dependent upon the occurrence of a possible, but not probable,…
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Which of the following statements is true regarding the acquisition method of accounting for a business combination? a. Assets of the acquired company are recorded at book values. b. Assets of the acquired company are recorded at fair value, but only if the acquisition cost equals or exceeds fair value of the subsidiary's net assets. c. Assets of the acquired company are recorded at fair values regardless of the acquisition cost. d. Consulting costs related to the combination reduce additional paid-in capital.
Choose the letter of the correct answer: 1. What amount of allocated excess/purchase differential amortization is recognized in the consolidated financial statements subsequent to the subsidiary’s acquisition? A. The noncontrolling interest percentage ownership in the subsidiary B. 100 percent of the purchase differential amortization C. Allocated excess/purchase differentials are not amortized D. The parent percentage ownership in the subsidiary 2. What amount of allocated excess/purchase differential amortization is recognized in the consolidated financial statements subsequent to the subsidiary’s acquisition? A. Allocated excess/purchase differentials are not amortized B. The parent percentage ownership in the subsidiary C. The noncontrolling interest percentage ownership in the subsidiary D. 100 percent of the purchase differential amortization
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If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: Compute for the Consolidated Equity at the date of acquisition.
Puncho Company is acquiring the net assets of Semos Company in exchange for common stock valued at $900,000. The Semos identifiable net assets have book and fair values of $400,000 and $800,000, respectively. Compare accounting for the acquisition (including assignment of the price paid) by Puncho with accounting for the sale by Semos.
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