After studying this chapter, you should be able to: |
LO1 | Discuss the motives for business combinations. |
LO2 | Recognize when consolidation of financial information into a single set of statements is necessary. |
LO3 | Define the term business combination and differentiate across various forms of business combinations. |
LO4 | Describe the valuation principles of the acquisition method. |
LO5 | Determine the total fair value of the consideration transferred for an acquisition and allocate that fair value to specific subsidiary assets acquired (including goodwill), and liabilities assumed, or a gain on bargain purchase. |
LO6 | Prepare the journal entry to consolidate the accounts of a subsidiary if dissolution takes place. |
LO7 | Prepare a worksheet to consolidate the accounts of two companies that form a business combination if dissolution does not take place. |
LO8 | Describe the two criteria for recognizing intangible assets apart from goodwill in a business combination. |
LO9 | Appendix: Identify the general characteristics of the legacy purchase and pooling of interest methods of accounting for past business combinations. Understand the effects that persist today in financial statements from the use of these legacy methods. |