09_Fischer10e_SM_SA01_final -

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SPECIAL APPENDIX 1 UNDERSTANDING THE ISSUES 1. In order to record the shares acquired at fair value, the individual stockholder’s residual in- terest must have increased and the new resid- ual interest must be under 5%; or the stock- holder’s residual interest decreased and (a) the voting interest must be under 20%, (b) the indi- vidual supplied less than 20% of the company’s total capital including debt, and (c) the new re- sidual interest is less than 5%, and all the former owners whose ownership interest de- creased must be under 20%. Those shares not recorded at fair value are re- corded at the simple-equity-adjusted cost of the owner. 2. When at least 80% of the consideration given is not monetary, the shares recorded at fair value are limited to the percentage of shares ac- quired for monetary consideration. Thus, if 90% of the shares were acquired from noncontrolling group stockholders, but the total monetary con- sideration given to all former owners was 70%, only 70% of the shares acquired from the former noncontrolling group could be recorded at fair value. The balance of the shares would be recorded at book value.
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09_Fischer10e_SM_SA01_final -

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