Consolidation of Financial Information

dealt at arm’s length, and the selling price of $1,250,000 is the fair market value of the shares at the

Assets are to be recorded and valued based of the type of asset there are.

First, let’s get a little background on accounting for business combinations. The current accounting method for business combinations was issued in 2007 with the adjustment to SFAS 141(R), “Business Combinations” under FASB ASC 805. This change was made by the Financial Accounting Standard Board (FASB) in collaboration with International Accounting Standards Board (IASB) in order to make the U.S. accounting standards align more closely with the standards of the International Financial Reporting Standards (IFRS). The business combination accounting is initiated when a company gains control of a subsidiary either by obtaining or purchasing the

• Transaction structures—the takeover could involve a cash offer, a share offer, an asset swap or a combination of these methods. Need to consider legal, taxation and accounting issues.

Cisco allocates the fair value of the purchase consideration of its acquisitions to the tangible assets, liabilities, and intangible assets acquired. The excess fair value of the purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

If these estimated undiscounted future cash flows are less than the carrying value of the asset, an impairment charge is recognized for the excess, if any, of the asset’s carrying value over its estimated fair value.

Question 1 Several factors have been proposed as providing a rationale for mergers. Among the more prominent ones are (1) tax considerations, (2) diversification, (3)

A merger is a partial or total combination of two separate business firms and forming of a new one. There are predominantly two kinds of mergers: partial and complete. Partial merger usually involves the combination of joint ventures and inter-corporate stock purchases. Complete mergers are results in blending of identities and the creation of a single succeeding firm. (Hicks, 2012, p 491). Mergers in the healthcare sector, particularly horizontal hospital mergers wherein two or more hospitals merge into a single corporation, are increasing both in frequency and importance. (Gaughan, 2002). This paper is an attempt to study the impact of the merger of two competing healthcare organization and will also attempt to propose appropriate

extracted from the combination of the two businesses. For example, such a consolidation would allow

According to this concept the asset is recorded in the books of accounts at the price paid for it and not at its market value. For example: if a business entity purchases a building valued at $15 million from a friend for $12 million, this asset would be recorded at $12 million and not at $ 15 million, because for the business entity the cost was $12 million and not $15 million.

* To recognise separately, at the acquisition date, the acquiree’s identifiable assets, liabilities and contingent liabilities.

• Fixed asset acquired in exchange or part exchange should be recorded at fair market value or net book value of asset given up adjusted for balancing payment, cash receipt etc. Fair market value is

In this paper, I will provide an explanation for the business combination method I selected in expanding the corporation by acquiring another firm, the reason for selecting that business combination method, and how the purchase will grow the business. I will also analyze the accounting requirements for the business combination method I selected and how I determined goodwill was impaired and the financial impact of such impaired goodwill.

The completions and interests in Mergers and Acquisitions (M&A) is growing largely day by day (Michael A. Hitt, Jeffrey S. Harrison, R. Duane Ireland, 2001) During the recent recessions companies are looking into different ways to stay afloat, to grow and even continue to exist, and one of the best ways of doing this, is to merge or acquire another company (Dash, A, 2010) Lynch (cited in David Faulkner, Satu Teerikangas, Richard J. Joseph, 2012) also believes in some instances growth can take place within sector integrations which includes horizontal or vertical or even by going into a new sector by acquiring a new business, which is called diversification. A Merger or Acquisition takes place when two or more companies join

In the vast and voracious business world, attention from media as well as corporations themselves have been predominantly focused on the phenomena that is mergers and acquisitions, undoubtedly due to the sheer volume and frequency of merger and acquisition activity in the past couple of decades. Yet, societies appetite analyzing mergers have been documented as far back as the merger waves of 1898–1902 (Nelson 1959)