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6 Cards in this Set

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  • Back
What is a Statutory Merger, and what does it imply for accounting purposes?
A+B= A
Company B absorbed into A
Company B ceases to exist
Shares of B are retired
Only A survives
Accounting: assets/liabilities, no need to consolidate
What is a Statutory Consolidation, and what does it imply for accounting purposes?
A+ B= C
New company C formed, absorbs A & B
Co's A&B cease to exist
A&B shares retired
Only C survives
Accounting: assets/liabilities, no need to consolidate
What is an Asset Acquisition, and what does it imply for accounting purposes?
A+B= A or A+B= A+B
One co. acquires all or part of assets, liabs. and biz ops
Selling co. may continue to survive or liquidate
Accounting: assets/liabilities, no need to consolidate
What is a Stock Acquisition, and what does it imply for accounting purposes?
A+B= P+S
One co. acquires most or all voting stock of another
Both co's survive
Acq. co is parent of acquired co., because it has controlling interest
Accounting: Investment in subsidiary, consolidation
Acquisition cost is _______, and does not include ________
Fair value of 1) assets, such as cash, transferred by the acquirer to the former owners of the acquiree
2) Liabilities incurred by the acquirer and owed to former owners of the acquiree
3) Stock issued by the acquirer to the former owners of the acquiree

DOES NOT INCLUDE
1) Costs of registering and issuing securities (Charged against APIC)
2) Direct costs
3) Indirect costs
4) Contingent liability
Intangible assets involved in a merger are recognized when..
1) Intangible asset arises from contractual or legal rights
2) Intangible asset is separable (eg. customer list)