Acquisition date The date on which the acquirer obtains control of the acquiree

Acquisition date the date on which the acquirer

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Acquisition date = The date on which the acquirer obtains control of the acquiree. Entity P acquires 100% of entity S for cash. The sale agreement specifies that acquisition date is 10 June. Directors are nominated by entity P and appointed in place of existing directors on 1 July, the date when all of the conditions in the sale agreement are satisfied. The shares in entity S are transferred to entity P when the consideration in paid in cash on 20 July. What is acquisition date? 1 July; the directors are in place and all the other conditions in sales agreement are satisfied; here the actual substance of agreement comes into place. Entity P here actually gets the power to control entity S. So from accounting perspective Look at economical substance.
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Exercise 14.1 ~Add pp slides~ Consideration transferred: 100,000 shares at $6.50 each = $650.000 Goodwill = $650.000 - $640.000 (net assets) = $10.000 Intangible assets internally generated must be calculated because this is needed to calculate goodwill. Under IFRS; gain on bargain purchase is exceptional. Because we need to calculate with fair values. Consolidation: Excersice 20.3 – Pluto control over Sun? See powerpoint slides.
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