BU487 Lecture Notes - Lecture 5: Book Value, Kolmogorov Space, Financial Statement
Document Summary
If your ownership is lower than 50%, you may still have the control if: In a friendly combination, the management and the board of directors of both companies recommend that their shareholders approve the combination proposal. In cash payment, the company that paid cash is the acquirer. If price paid is > fv of identifiable net assets the excess is reported as goodwill. These should be expensed in the period of acquisition: the cost of issuing debt or shares are not included in acquisition cost but are charged to the related debt or share capital. +/- acquisition differential = consolidated amount: acquisition differential= fv - bv, on the date of acquisition, consolidated sha(cid:396)eholde(cid:396)s" e(cid:395)uity is al(cid:449)ays e(cid:395)ual to the pa(cid:396)e(cid:374)t"s e(cid:395)uity, example: case 4: assume that on january 1, year 2, a. Company paid ,000 cash to the shareholders of b. Because cash was the means of payment, a company is the acquirer.
