How would you explain the accounting valuations for the post -control step acquisitions to the Berkshire Hathaway executives? Do you agree or disagree with the GAAP treatment of reporting additional investments in subsidiaries when control has previously been established?
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How would you explain the accounting valuations for the post -control step acquisitions to the Berkshire Hathaway executives? Do you agree or disagree with the GAAP treatment of reporting additional investments in subsidiaries when control has previously been established?
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- Because of the acquisition of additional investee shares, an investor will now change from the fair-value method to the equity method. Which procedures are applied to accomplish this accounting change?When a public shareholding company changes an accounting policy voluntarily, it has to (a) Inform shareholders prior to taking the decision. (b) Account for it retrospectively. (c) Treat the effect of the change as an extraordinary item. (d) Treat it prospectively and adjust the effect of the change in the current period and future periods.Describe the ideas and valuation techniques that underpin the acquisition method of accounting for noncontrolling interests in a corporation.
- According to IAS 39 Financial Instruments: Recognition and Measurement, at what amount should a financial instrument such as a long-term investment in the shares of a company initially be measured? A. Cost of the nearest equivalent financial instrument B. Fair value of consideration given C. Fair value of consideration given plus directly attributable transaction costs D. Fair value of consideration given less directly attributable transaction costsWhich of the following is NOT a required disclosure for any entity that holds an interest in a VIE? a.The significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement in a VIE b.How the entity's involvement involvement with the VIE is perceived by Wall Street analysts c.The nature of restrictions on a consolidated VIE’s assets and on the settlement of its liabilities reported by an enterprise in its statement of financial position, including the carrying amounts of such assets and liabilities. d. The nature of, and changes in, the risks associated with an enterprise’s involvement with the vieWhich of the following is not an indicator about material uncertainty over the entity's ability to continue as a going concern? O a. Cancellation of company's production license due to change on government policies. O b. Substantial operating losses or significant deterioration in the value of assets used to generate cash flows O . Net liability or net current liability position. O d. Non-declaration of dividend to equity shareholders.
- Which of the following should be presented in the statement of changes in equity? A. Distributions to owners B. Investments by owners C. Change in ownership interest in subsidiary that does not result in a loss of control D. All of these are presented in the statement of changes in equityAn entity acquired control of another entity by purchasing shares in steps. Which of the following statements regarding this type of acquisition is true? A. The previously held shares should be remeasured at fair value on the acquisition date and the gain recognized in earnings of the period B. The previously held shares should be remeasured at fair value on the acquisition date and any gain on previously held shares should be included in other comprehensive income for the period C. The acquisition cost includes only the newly issued shares measured at fair value on the date if acquisition D. The cost of acquisition equals the amount paid for the previously held shares plus the fair value of shares issued at date of acquisition.Acquirer Corporation would like to purchase the equity of Target Corporation. Target Corporation has the following financial information and forecasts: *How much is the value of control over Target Corporation from the point of view of Acquirer Corporation?
- Explain the differences between IFRS and US GAAP in process of business acquisitions and consolidation of financial statements. Kindly explain in detailWhich of the following is correct regarding the classification of investment in debt instruments as financial asset at fair value through OCI? Group of answer choices All of these. An entity may make an irrevocable election to classify investment in a debt instrument that is not ‘held for trading’ as such. In order to be classified as such, a debt instrument needs to both have simple principal and interest cash flows and be held in a business model in which both holding and selling financial assets are integral to meeting management’s objectives. This classification is not allowed for investment in debt instruments.What has been the likely effect of the Gramm-LeachBliley Act on financial consolidation?
