ADMS 4520 Lecture : lecture_8 notes.docx
Document Summary
The following items arising from business combinations must be adjusted on the consolidated cash flow statement: the cash, if any, paid for the acquisition of a subsidiary is presented net of the subsidiary"s cash acquired at that date, the acquisition differential is amortized in the consolidated income statement but does not affect cash flows, non controlling interest in the consolidated income statement is an allocation of the entity"s net income and does not affect cash flows, dividends paid by subsidiaries to the parent company do not change the combined entity"s cash. For each subsequent increase of significant influence that does not result in control, determine a separate ad based on the cost paid for the additional proportion of shares acquired: do not revalue previous purchases while using equity accounting, the ad amortization schedule is expanded by adding columns to track separately the amortization and unamortized balance of the ad arising from each step acquisition.