TAILIEUCHUNG - Lecture Advanced accounting (6th Edition): Chapter 8 - Jeter, Chaney

Chapter 8 - Changes in ownership interest. This chapter takes away another simplifying assumption that we’ve made previously. Many times P doesn’t buy a controlling interest in S all at once – it’s done over time. Until P has actually achieved control, its investment in S is treated as a simple investment. | Changes in Ownership Interest 1 Learning Objectives Identify the types of transactions that change the parent company’s ownership interest in a subsidiary. Describe the process needed when the parent acquires subsidiary shares through multiple open market purchases. Explain how the parent reports the difference between selling price and book value when shares are sold subsequent to acquisition. Compute the controlling interest in income after the parent sells some shares of the subsidiary company. Describe the effect on the eliminating process when the subsidiary issues new shares entirely to the parent, and the parent pays either more or less than the book value of the subsidiary shares. Describe the impact on the parent’s investment account when the subsidiary issues new shares and either the new shares are purchased ratably by the parent and noncontrolling shareholders or entirely by the noncontrolling shareholders. 2 Changes in Ownership Interest Parent company can effectively increase its ownership interest in a subsidiary by either buying additional subsidiary shares directly from third parties or having a subsidiary purchase its (subsidiary’s) shares from third parties. Parent company can effectively decrease its ownership interest in a subsidiary by either selling some subsidiary shares directly to third parties or having a subsidiary sell additional shares (including treasury shares) to third parties. 3 LO 1 Changes in ownership. Changes in Ownership Interest Current GAAP (ASC Topics 805 and 810): Acquisitions that take place in stages or partial sales: Measure and recognize acquiree’s identifiable assets and liabilities at 100% of their fair values on date the acquirer obtains control, and Recognize all acquiree’s goodwill (not just parent’s share), measured as difference between fair value of acquiree on acquisition date and fair value of identifiable net assets. 4 LO 1 Changes in ownership. (Continued) Changes in Ownership Interest Current GAAP: .

• Kế toán - Kiểm toán
• Advanced accounting
• Lecture Advanced accounting
• Kế toán nâng cao
• Ownership interest
• Changes in ownership
• Equity method
• Advanced financial accounting
• Financial statements
• Equity method of accounting
• Accounting valuation
• International accounting diversity
• Accounting for legal reorganizations
• Accounting for state
• Accounting for leases
• Accounting for estates
• Investment accounting
• Consolidation of financial information
• Consolidated financial statements
• Intra entity asset transactions
• Variable interest entities
• Income taxes
• Interim reporting
• Foreign currency transactions
• Foreign currency financial statements
• Exchange commission
• Partnership advantages
• Statement of liquidation