Case Study Of Alberto Culver's Acquisitions

1451 Words6 Pages
Reporting entities may invest in other companies for numerous reasons .Revolutionary ideas and partnering with industry leaders is one path forward from the rapid pace of business. Alliances established through investments may create value that could not otherwise be generated. Finally, readily accessible sources of financing may further encourage companies to seek opportunities and favorable circumstances to invest in. When investing some companies may not wish to gain control of another entity (Associates) or may find it difficult to do so, in this case collaboration becomes the best solution (Joint venture), some may wish to gain control and as such operations or a business is purchased as a form of investment (subsidiary). Unilever’s Acquisitions The acquisition of 38 % ordinary shares of Talenti, 80 % shares of Alberto Culver by Unilever and 40 % ordinary shareholding by Alberto Culver in Talenti is a form of investment to those reporting entities and the classification of these investments in Unilever’s financial records might differ from eachother depending on the level of ownership or amount of shares that the other entity has in another entity or a binding contractual agreement. Accounting principles and reporting The legal form,…show more content…
Alberto Culver and Unilever both invested in Talenti Gelato & Sorbetto in form of ordinary equity of 40% and 38% respectively. According to section 14 it can be said that both the entities have significant influence (ordinarily having 20% or more of voting power) in Talenti. “Where the investor is a parent the voting rights of the parent and its subsidiaries in the investee are aggregated in order to determine whether the parent (investor) has significant influence or not over the investee” (IFRS for SMEs, 2009, p

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