Hello all,
I'm new here and I'm facing a case that I don't know the treatment thereof:
Company A acquired 30.5% of company B on 28 Feb. 2013. Payment of $191,949,562 was made to company C (the former shareholder of company B and parent of company A @ 100%). Payment covers the following:
1- Share of capital in the subsidiary company B amounting $68,930,207 (representing 30.5% of outstanding capital at nominal value)
2- Loan originally made from company C to company B amounting $114,700,380
3- Accrued interest on the loan referred to amounting $69,555
4- Retained earning for the year 2012 amounting $20,305,121
Total of items 1,2,3 & 4 amounts to $204,005,263 which is $12,055,698 more than the consideration paid.
How can I allocate consideration paid and account for the transaction in general, is there negative goodwill here ?
PS. none of these companies are publicly listed.
Thanks you for your help.
Costa
I'm new here and I'm facing a case that I don't know the treatment thereof:
Company A acquired 30.5% of company B on 28 Feb. 2013. Payment of $191,949,562 was made to company C (the former shareholder of company B and parent of company A @ 100%). Payment covers the following:
1- Share of capital in the subsidiary company B amounting $68,930,207 (representing 30.5% of outstanding capital at nominal value)
2- Loan originally made from company C to company B amounting $114,700,380
3- Accrued interest on the loan referred to amounting $69,555
4- Retained earning for the year 2012 amounting $20,305,121
Total of items 1,2,3 & 4 amounts to $204,005,263 which is $12,055,698 more than the consideration paid.
How can I allocate consideration paid and account for the transaction in general, is there negative goodwill here ?
PS. none of these companies are publicly listed.
Thanks you for your help.
Costa