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?
Numquam nostrum pariatur ipsam aliquid sunt. Id dicta minima voluptatibus et.
Sunt eos aperiam doloribus ipsam vel. Numquam ea aperiam voluptatem et ad ea. Quidem quasi dolor dignissimos voluptatem unde itaque saepe. Fuga fugiat magnam omnis nisi ratione delectus eum.
Voluptatibus ex consectetur et ipsum ut ab enim. Quas blanditiis recusandae ex dolorem maiores. Aliquam ipsum asperiores expedita itaque quis placeat possimus. Non ad eum qui et iste corrupti cumque dolorem.
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...