Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 5, Problem 5.15AQ
To determine
Differential:
In investment accounting, the term differential is used to represent the difference between the sum of fair value paid, fair value of shares already owned by the investing company, fair value of non controlling interest and the book value of the net identifiable assets acquired.
To Indicate the importance of a consolidated financial statement in case of a large differential.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
(TCO E) What is the purpose of the adjustments to depreciation expense within the consolidated group when there has been an intra-entity transfer of a depreciable asset?
Key questions to consider when determining the appropriate consolidation adjustment entries include the following except for:
a. What has been recorded by the legal entities?
b. What is the tax effect of the adjustments made?
c . Does the transaction involve the parent entity selling assets to the subsidiary, or the subsidiary selling assets to the parent entity?
d. Is this a prior period or a current period transaction?
Any excess of the fair value over book value attributable to land on the date of acquisition is to be:
a. allocated to other identifiable assets.
b. capitalized and amortized.
c. charged to Retained Earnings on the date of acquisition.
d. taken into income when the Land is sold.
Chapter 5 Solutions
Advanced Financial Accounting
Ch. 5 - Where is the balance assigned to the...Ch. 5 - Why must a noncontrolling interest be reported in...Ch. 5 - Prob. 5.3QCh. 5 - Prob. 5.4QCh. 5 - Prob. 5.5QCh. 5 - Prob. 5.6QCh. 5 - Prob. 5.7QCh. 5 - Prob. 5.8QCh. 5 - Prob. 5.9QCh. 5 - Prob. 5.10Q
Ch. 5 - Under what Circumstances would a parent company...Ch. 5 - Prob. 5.12QCh. 5 - Prob. 5.13QCh. 5 - Prob. 5.14AQCh. 5 - Prob. 5.15AQCh. 5 - Consolidation Worksheet Preparation The newest...Ch. 5 - Prob. 5.2CCh. 5 - Prob. 5.3CCh. 5 - Prob. 5.4CCh. 5 - Prob. 5.5CCh. 5 - Prob. 5.1.1ECh. 5 - Prob. 5.1.2ECh. 5 - Prob. 5.1.3ECh. 5 - Prob. 5.1.4ECh. 5 - Prob. 5.2.1ECh. 5 - Prob. 5.2.2ECh. 5 - Prob. 5.2.3ECh. 5 - Prob. 5.2.4ECh. 5 - Prob. 5.2.5ECh. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Balance Sheet Worksheet Problem Company owns 90...Ch. 5 - Prob. 5.6ECh. 5 - Prob. 5.7ECh. 5 - Prob. 5.8.1ECh. 5 - Prob. 5.8.2ECh. 5 - Prob. 5.8.3ECh. 5 - Prob. 5.8.4ECh. 5 - Prob. 5.8.5ECh. 5 - Prob. 5.8.6ECh. 5 - Prob. 5.8.7ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10ECh. 5 - Prob. 5.11ECh. 5 - Prob. 5.12ECh. 5 - Prob. 5.13ECh. 5 - Prob. 5.14ECh. 5 - Prob. 5.15ECh. 5 - Prob. 5.16ECh. 5 - Prob. 5.17AECh. 5 - Prob. 5.18AECh. 5 - Prob. 5.19PCh. 5 - Prob. 5.20PCh. 5 - Prob. 5.21.1PCh. 5 - Multiple-Choice Questions on Applying the Equity...Ch. 5 - Prob. 5.21.3PCh. 5 - Prob. 5.21.4PCh. 5 - Prob. 5.22PCh. 5 - Computation of Account Balances Pencil Company...Ch. 5 - Prob. 5.24PCh. 5 - Equity Entries with Differential On January 1,...Ch. 5 - Equity Entries with Differential Plug Corporation...Ch. 5 - Prob. 5.27PCh. 5 - Prob. 5.28PCh. 5 - Prob. 5.29P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- During the measurement period, which of the following may affect the amount ofgoodwill from business combination? A.New information regarding estimates in the contingent consideration that are not existing atthe date of acquisitionB.Nothing can affect the amount of goodwill.C.New information regarding estimates in the contingent consideration that are existing at thedate of acquisition.D.New information regarding estimates in the contingent considerationarrow_forwardWhich method of the matching principle is used when a company recognizes depreciation expense on the income statement? Group of answer choices A. Installment method B. Systematic and rational allocation C. Immediate recognition D. Associating cause and effectarrow_forwardA consolidation adjustment will have a tax effect if: Select one: A. It adjusts the carrying amount of an asset B. It adjusts the carrying amount of liabilityC. All of the above D. It recognizes assets and liabilities not recorded in accounting records of groupcompaniesarrow_forward
- The cost of land usually includes all of the following excepta. commission related to acquisitionb. cost of surveyc. property tax after the date of acquisition assumed by the purchaserd. property tax up to the date of acquisition assumed by the purchaserarrow_forwardWhich of the following is true about intragroup transfer of property, plant and equipment (PPE) as part of consolidation accounting? Group of answer choices We have to add back consequential depreciation as a result of eliminating the gain on disposal of PPE at group level Intragroup transfer of property, plant and equipment at a loss will trigger additional deferred tax asset adjustments at group level We have to eliminate consequential depreciation as a result of eliminating the gain on disposal of PPE at group level Intragroup transfer of property, plant and equipment at a profit will trigger the reduction of deferred tax liabilities at group levelarrow_forwardThe consolidated balance of fixed assets will be affected by working paper entries involving all of the following, except: A. Excess of fixed asset FV over BV of the parent at the date of acquisition B. Amortization of the excess of fixed asset FV over BV of the subsidiary at the date of acquisition C. Realized gain or loss on intercompany sale of fixed asset D. Unrealized gain or loss on intercompany sale of fixed assetarrow_forward
- The consolidated balance of fixed assets will be affected by working paper entriesinvolving all of the following,except: A.Excess of fixed asset FV over BV of the parent at the date of acquisitionB.Unrealized gain or loss on intercompany sale of fixed assetC.Realized gain or loss on intercompany sale of fixed assetD.Amortization of the excess of fixed asset FV over BV of the subsidiary at the date ofacquisitionarrow_forwardThe consolidated balance of fixed assets will be affected by working paper entriesinvolving all of the following,except: a.Excess of fixed asset FV over BV of the parent at the date of acquisitionb.Amortization of the excess of fixed asset FV over BV of the subsidiary at the date ofacquisitionc.Unrealized gain or loss on intercompany sale of fixed assetd.Realized gain or loss on intercompany sale of fixed assetarrow_forwardfor the following intercompany transaction state the principle to be used in accounting for intercompany gains on current and future consolidated income statements: Gains on the sale of landarrow_forward
- Transfers from investment property to property, plant and equipment are appropriate a. The entity can never transfer property into another classification on the balance sheet Once it is classified as investment property. b. When there is change of use. c. Only when the entity adopts the fair value model under IAS 38. d. Based on the entity’s discretion.arrow_forwardDescribe a variable interest entity, a primary beneficiary, and the factors used to decide when a variable interest entity is subject to consolidation.arrow_forwardIf an entity recognizes in the carrying amount of an item of property, plant and equipment the cost of a replacement for part of the item, then it derecognizes the carrying amount of the replaced parta. If the replaced part had been depreciated separatelyb. If the asset is depreciated using components depreciationc. If it is practicable for an entity to determine the carrying amount of the replaced partd. Regardless of whether the replaced part had been depreciated separatelyarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you