Discussion of Hewlett-Packard's Acquisition of Autonomy

First, let’s get a little background on accounting for business combinations. The current accounting method for business combinations was issued in 2007 with the adjustment to SFAS 141(R), “Business Combinations” under FASB ASC 805. This change was made by the Financial Accounting Standard Board (FASB) in collaboration with International Accounting Standards Board (IASB) in order to make the U.S. accounting standards align more closely with the standards of the International Financial Reporting Standards (IFRS). The business combination accounting is initiated when a company gains control of a subsidiary either by obtaining or purchasing the

Paragraph 805-10-50-1 identifies one of the objectives of disclosures about a business combination. To meet that objective, the acquirer shall disclose all of the following information for each business combination that occurs during the reporting period:

For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.

HP entered into an agreement with Compaq Computer Corporation in September 2001. In this definitive agreement, HP is going to purchase all of Compaq’s common shares outstanding, and pay a total price of 0.6325 shares of its common stock for each share of Compaq’s common stock.

Complete an income statement, balance sheet and statement of cash flows for 2011. Please provide information on any assumptions you make not already stated in the case.

1. Assess Interco’s financial performance. Why is the company a target of a hostile takeover attempt?

The merger of the three departments is intended as a resource maximization measure, anticipated to reduce costs, eliminate redundancies, optimize personnel function, and improve overall efficiency. Utilization review is an important branch of

This is an unusual type of corporate relationship. The first set of questions will reinforce your understanding of the relationship and provide evidence on the pros and cons of consolidation.

Determine the key factors that will drive the financial planning process for most organizations in the post-merger phase, and examine the related impact to the organization process. Provide support for your rationale.

1. Assess Interco's financial performance. Why is the company a target of a hostile takeover attempt?

For HP, introduction of Merced chip made the remarkable strategic turning point in its enterprise computing

Issues investigated in this report will be discussed neutrally and objectively. However, there are still numbers of limitations in this report due to many factors. First of all is the biasness of the information collected from the interview of employees in the company. These information may not be neutral and trustworthy; or even misleading. Also, lacking of time is another limitation of this report. Since this consulting report is conducted within a limited time, the consultant cannot address all issues but major points preventing the merger goes smoothly. In addition, financial issues, which can also be a factor

2. Do the financial statements for the two firms enable you to compare their performance? If not, what changes need to be made to ensure comparability?

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 1, 2011. The major changes in the acquisition method involve variations to fair value measurement, goodwill recognition, and non-controlling interests.

This is a research assignment regarding the analysis of a friendly takeover example and a hostile takeover example in the year 2010 to 2011. As for the friendly takeover acquisition, it is still in process with a vertical business combination of building materials supper and peat moss distributor. As for the hostile takeover acquisition, this is a Horizontal Business Combination of two mineral mining companies.