Acquisition accounting
Hi guys,
Apologies for spamming the forums recently with all my piled up queries about finance.
I would like to understand the merger/acquisition accounting. Consider the following example of two independent companies, A and B (All figures in $, for simplicity)
Comp A: Total Balance sheet size of 200
Equity: 50
Liabilities: 150
Fixed Asset: 20
Current Asset: 180 (including cash)
Comp B: Total Balance sheet size of 100
Equity: 75
Liabilities: 25
Fixed Asset: 20
Current Asset: 80 (including cash)
Company A acquires 100% of Company B, company B becomes a wholly owned subsidiary of A, through:
i. $100 paid to stakeholders (secondary transaction), and
ii. $50 money invested in the company for future capital needs (primary transaction)
Post this acquisition, How will Company A's standalone and consolidated Balance Sheet look like?
Quasi minima magni eos fuga et natus ut. Eos laboriosam fuga debitis quaerat saepe. Ut quisquam non quod enim ad illo distinctio. Labore ut vel sed cupiditate. Consequuntur vel velit qui possimus temporibus. Et omnis eius recusandae architecto molestiae et illum. Et ipsam sit expedita magnam incidunt necessitatibus.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...