{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 16 - Solution Manual

Fasb asc 16 5 proportionate consolidation search

Info iconThis preview shows pages 18–20. Sign up to view the full content.

View Full Document Right Arrow Icon
FASB ASC 16-5 Proportionate Consolidation Search proportionate consolidation 932-810-45 Proportionate Consolidation 45-1 Paragraph 810-10-45-14 explains that a proportionate gross financial statement presentation is not appropriate for an investment in an unincorporated legal entity accounted for by the equity method of accounting unless the investee is in either the construction industry or an extractive industry (as discussed in this Topic and paragraph 930-810-45-1 ). As indicated in that paragraph, an entity is in an extractive industry only if its activities are limited to the extraction of mineral resources (such as oil and gas exploration and production) and not if its activities involve related activities such as refining, marketing, or transporting extracted mineral resources. FASB ASC 16-6 Value beyond Proven and Probable Reserves Search value beyond proven and probable reserves 930-805-30 Value Beyond Proven and Probable Reserves 30-1 An entity shall include value beyond proven and probable reserves in the value allocated to mining assets in a purchase price allocation to the extent that a market participant would include value beyond proven and probable reserves in determining the fair value of the asset. > Anticipated Future Price Fluctuations 30-2 An entity shall include the effects of anticipated fluctuations in the future market price of minerals in determining the fair value of mining assets in a purchase price allocation in a manner that is consistent with the expectations of marketplace participants. Generally, an entity should consider all
Background image of page 18

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
355 available information including current prices, historical averages, and forward pricing curves. Those marketplace assumptions typically should be consistent with the acquiring entity's operating plans with respect to developing and producing minerals. It generally would be inappropriate for an entity to use a single factor, such as the current price or a historical average, as a surrogate for estimating future prices without considering other information that a market participant would consider. FASB ASC 16-7 Demutualization of Life Insurance Companies Search Demutualization 944-895-05 > The Demutualization Process 05-5Mutual insurance entities differ from stock insurance entities in that they do not have stockholders. A mutual insurance entity is considered to be owned by policyholders whose insurance contracts embody their rights as insureds and as members of the mutual insurance entity. 05-6The process of demutualization or formation of a mutual insurance holding entity is subject to scrutiny and approval by state insurance regulatory authorities. Most states have some form of demutualization statute. A range of demutualization statutes and regulations exist for insurance entities. Typically, those laws contemplate a direct and full reorganization of the mutual insurer to a stock form.
Background image of page 19
Image of page 20
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page18 / 23

FASB ASC 16 5 Proportionate Consolidation Search...

This preview shows document pages 18 - 20. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online