Business Combinations Advanced Accounting 01/24/2014 Business Combinations The primary goal of a business combination is business expansion. A business combination‚ or when “operations of two or more companies are brought under common control” (Jeter & Cheney‚ 2012)‚ can allow companies to expand. There are two types of expansion: internal expansion‚ which focuses on research and development to increase the success of the company‚ and external expansion‚ which focuses on increasing the success
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Chapter 3 Business Combinations Introduction In the previous chapter‚ we pointed out that a corporation can obtain a subsidiary either by establishing a new corporation (a parent-founded subsidiary) or by buying an existing corporation (through a business combination). We also demonstrated the preparation of consolidated financial statements for a parent-founded subsidiary. When a subsidiary is purchased in a business combination‚ the consolidation process becomes significantly more
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Business Combinations Assignment 1 Brenda Roper Professor Robert Neely ACC 401 July 24‚ 2013 Page 1 The business combination method I selected is the acquisition method. Business combinations have implemented the newly created accounting treatment called the “acquisition method.” The major changes in the acquisition method involve variations to fair value measurement‚ goodwill recognition‚ and non-controlling interests. Under this method‚ the parent company reported the net
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Business Combination Amendments November 29‚ 2008 Introduction There have recently been a number of significant accounting changes due to FASB and the International Accounting Standards Board (IASB) making modifications for the accounting treatment of business combinations in SFAS 141(R) and IFRS 3. Business combinations have implemented the newly created accounting treatment called the “acquisition method.” It will replace of the current “purchase method” strategy effective January
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BUSINESS COMBINATIONS Multiple Choice Questions 1. Which of the following is a reason why a company would expand through a combination‚ rather than by building new facilities? a. A combination might provide cost advantages. b. A combination might provide fewer operating delays. c. A combination might provide easier access to intangible assets. d. All of the above are possible reasons that a company might choose a combination. 2. A business combination in which a new corporation
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Chapter 1 BUSINESS COMBINATIONS Answers to Questions 1 A business combination is a union of business entities in which two or more previously separate and independent companies are brought under the control of a single management team. FASB Statement No. 141R describes three situations that establish the control necessary for a business combination‚ namely‚ when one or more corporations become subsidiaries‚ when one company transfers its net assets to another‚ and when each combining company
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Australian Requirement for Business Combinations Abstract: The issue of accounting for Business Combinations‚ according to Australian standards‚ has been a cause of considerable concerns and controversies for both‚ accountants and academics. However‚ due to the enormity of transactions involved in it‚ it becomes highly important to understand its application. In this research‚ we will outline various concepts and definitions to business combinations and address some important issues such
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a number of issues relevant to the expansion of its business. The company that we had to advise is Cottontex‚ specialised in men’s and women’s blouses‚ shirts and trousers. Cottontex has the idea to expense it’s business with a skirt collection. To advise Cottontex the best as possible we first had to investigate if it would be realistic to expend the business of Cottontex. We had to set up a new production facility‚ which includes issues related to the expansion of the production facility. We also
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A SYNOPSIS OF ACCOUNTING FOR BUSINESS COMBINATIONS‚ INTANGIBLES AND GOODWILL IMPAIRMENT INTRODUCTION During the 1980 ’s and 1990 ’s a great number of business mergers and acquisitions took place. The generally accepted accounting principles to record the initial transaction and to account for the acquired assets during their estimated useful lives this were well established. Over time however‚ users of financial statements began to question whether those principles and practices accurately
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BUSINESS PROPOSAL The business I am using for this task is my family medical practice. The names of the practices and the physicians including the competitors‚ which will be used for the purpose of this paper‚ will be fictional names. Also the privacy and confidentiality policy according to the medical ethics will be honored. The fictional name for the physician of the medical practice I am doing a business proposal for is Dr Kinsley Eric and the name of the practice is Shalom Internal Medicine
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