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Acquisition Analysis

Prepare the consolidated financial statements of Ethan Ltd at 30 June 2018.

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Added on  2022-11-24

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This document provides an in-depth analysis of acquisition in financial accounting. It explains the process of consolidation and the aggregation of financial statements. The steps involved in the acquisition process are discussed, including the measurement of tangible and intangible assets, calculation of non-controlling interest, and recording of goodwill or gain. The document also includes a case analysis of Ethan Limited and Darren Limited, showcasing the calculation of gain on bargain and purchase and the impact on the financial position of Ethan Limited.

Acquisition Analysis

Prepare the consolidated financial statements of Ethan Ltd at 30 June 2018.

   Added on 2022-11-24

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Running Head: ACQUSITION ANALYSIS 1
ACQUSITION ANALYSIS
Acquisition Analysis_1
Running Head: ACQUSITION ANALYSIS
Table of Contents
Acquisition Analysis......................................................................................................... 3
Measurement.................................................................................................................. 4
Business combination valuation entries.....................................................................4
Financial Statements.................................................................................................. 7
Conclusion..................................................................................................................... 8
References..................................................................................................................... 9
Acquisition Analysis_2
Running Head: ACQUSITION ANALYSIS
Acquisition Analysis
Consolidation is a technical analysis and it the language of the business it is called as the merger
or acquisition of the companies of small nature into fewer large ones. In the context of the
financial accounting, acquisition means the aggregation of the financial statements. Under the
purpose of the taxation the entities are for the purpose of the calculation of the tax (Du and Sim,
2016).
The company needs to follow the method of the Acquisition for which the following steps are
required.
Measurement of the assets and liabilities that are of tangible nature.
The second step is to measure the intangible assets and the liabilities.
The amount of the non-controlling interest that have been acquired in the business
The seller gets the amount in return of selling of the business in the form of the
consideration.
The goodwill or the gain must be recorded respectively (Tang, 2019).
Net fair value of the identifiable
assets and liabilities of Darren Limited
Equity
$
54,000.00
Retained earnings
$
36,000.00
Asset Revaluation Surplus
$
18,000.00
$
108,000.00
Plant
$
1,050.00
Inventory
$
1,400.00
Total
$
110,450.00
Consideration Transferred
$
110,000.00
Gain on bargain and $
Acquisition Analysis_3

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