BusinessCombinationsPart3 - Partialstockacquisition

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Partial stock acquisition Acquirer invests in less than 100% of investee stock Investee still has outstanding stock in the market (and  therefore must  be a subsidiary) Non-controlling interest:  the equity interest of the  other (“minority”) shareholders in the investee How do we deal with this?
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FAS no. 160 Treatments Acquirer buying less than 100% owns a partial share of the  acquiree, BUT. ..  still has control of the entire subsidiary . Therefore, the acquirer's consolidated statements should  include fair value of all of the acquiree's assets and liabilities Initially measure the non-controlling interest at its fair value on  the acquisition date Separately account, equity method-style, for the non- controlling interest as part of owners' equity
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Example 3:  Verizon and Alltel – 80% Investment Here assume all is the same as in the actual transaction except assume  that Verizon only purchased 80% of Alltel’s outstanding stock.
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Verizon/Alltel 80% Transaction (FAS no. 141R):
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BusinessCombinationsPart3 - Partialstockacquisition

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