Management and Organizational Studies 4465A/B Lecture Notes - Lecture 3: Book Value, Financial Statement

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 4465A/B
• Professor: Danny Morrison

Document Summary

Business combination when one company, the acquirer, obtains control of one or more businesses. Control is the power to direct the relevant activities of the investee (that most significantly affect the investor"s returns) It requires that the investor has exposure, or rights to variable returns from its involvement with the investee and has the ability to use its power over the investee to affect the amount of the investor"s returns. Statutory amalgamation occurs when two or more companies combine to form a single legal entity: a company is wound up or winding up with they are dissolving the business and being taken over by a parent company. All business combinations are accounted for by using this method. The acquisition date is the date the acquirer obtains control of the acquiree: the fair value of the acquired business should be measured as of this date.