The noncontrolling in - Study guides, Class notes & Summaries

Advanced Financial Accounting and Reporting Comprehensive Exam 1-3 || Questions & Answers (100% Accurate) Advanced Financial Accounting and Reporting Comprehensive Exam 1-3 || Questions & Answers (100% Accurate) Growth in the complexity of the U.S. business environment has led to... - ANSWER - increasingly complex organizational structures as management has attempted to achieve its business objectives. Which of the following is not an appropriate reason for establishing a subsidiary? a)...

Advanced Accounting Ch. 3 exam Graded A+ Which method must be used if ASC 810-10-65 prohibits full consolidation of a 70% owned subsidiary? A) The cost method B) The Liquidation value C) Market value D) Equity method - answerD) Equity method From the standpoint of accounting theory, which of the following statements is the best justification for the preparation of consolidated financial statements? A) In substance the companies are separate, but in form the companies are one entity. B...

CHAPTER 2: CONSOLIDATION OF FINANCIAL INFORMATION Accounting standards for business combination are found in FASB ASC Topic 805, ―Business Combinations‖ and Topic 810, ―Consolidation.‖ These standards require the acquisition method which emphasizes acquisition-date fair values for recording all combinations. In this chapter, we first provide coverage of expansion through corporate takeovers and an overview of the consolidation process. Then we present the acquisition method o...

Advanced Financial Accounting - CHAPTER 1 Study Guide Spin-Off - answeroccurs when the ownership of a newly created or existing subsidiary is distributed to the parent's stockholders without the stockholders surrendering any of their stock in the parent company. - Thus, the company divests itself of the subsidiary because it is owned by the company's shareholders after the spin-off. Split-Off - answerThus, the company divests itself of the subsidiary because it is owned by the company...

Statements prepared for the parent company and its subsidiaries correct answers Consolidated statements The excess of the value implied by the purchase price over the fair value of the subsidiary's identifiable net assets correct answers Goodwill A parent owns at least 50 percent of a subsidiary correct answers Majority owned An entry made to remove P's investment account and P's share of S's equity accounts correct answers Elimination The portion of equity in S not owned by P co...

CH4 - LO1: Understand that complete ownership is not a prerequisite for the formation of a business combination. - ANSWER n/a CH4 - LO2: Describe the valuation principles underlying the acquisition method of accounting for the noncontrolling interest. - ANSWER nj/a CH4 - LO3 Allocate goodwill acquired in a business combination across the controlling and noncontrolling interests. - ANSWER ... CH4 - LO4 Understand the computation and allocation of consolidated net income in the presence of ...

of the Free Cash Flows, you determine the company's Terminal Value, using either the Multiples Method or the Gordon Growth Method, and then you discount that back to its Net Present Value using the Discount Rate. Finally, you add the two together to determine the company's Enterprise Value." Walk me through how you get from Revenue to Free Cash Flow in the projections. - answerFirst, confirm that they are asking for Unlevered Free Cash Flow (Free Cash Flow to Firm). If so: Subtract COG...

MEMO To: Vice-President of Finance Troy Company From: , CPA Re: Recording Acquisition Costs of Business Combination Troy Company incurred a variety of costs in acquiring the ownership of Kline Company and transferring the assets and liabilities of Kline to Troy Company. I was asked to review the relevant accounting literature and provide my recommendations as to what was the appropriate treatment of the costs incurred in the acquisition of Kline Company. Current accounting standards requir...

An enterprise that holds a variable interest in a variable interest entity (VIE) is required to consolidate the assets, liabilities, revenues, expenses, and noncontrolling interest of that entity if.The enterprise has a controlling financial interest in the VIE. The parent company acquires all of a subsidiary's common stock but only 70 percent of its preferred shares. This preferred stock pays a 7 percent annual cumulative dividend. No dividends are in arrears at the current time. How is the n...

Discounted Cash Flow Exam Questions With 100% Correct Answers What's the basic concept behind a Discounted Cash Flow analysis? - answerThe concept is that you value a company based on the present value of its Free Cash Flows far into the future. You divide the future into a "near future" period of 5-10 years and then calculate, project, discount, and add up those Free Cash Flows; and then there's also a "far future" period for everything beyond that, which you can't estimate as prec...