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Hi everyone
I am a university student and got stuck on an accounting problem. Would you please provide your valuable insights on h0w to address the issues? Thanks in advance.
XYZ Company acquired shares of a major manufacturing Company ABC. The BOD of XYZ are unsure whether the assets and liabilities be recognized in fair value. They are also concerned with the following issues:
i) Should the adjustments to fair value be made in the consolidation worksheets or in the accounts of ABC Ltd.? What is the best?
ii) What equity accounts should be used when revaluing the assets, and should different equity accounts such as income (similar to recognition of an excess) be used in relation to recognition of liabilities? What is the best?
iii) Do these equity accounts remain in existence indefinitely, since they do not seem to be related to the equity accounts recognized by ABC Ltd itself?
Please help.
I am a university student and got stuck on an accounting problem. Would you please provide your valuable insights on h0w to address the issues? Thanks in advance.
XYZ Company acquired shares of a major manufacturing Company ABC. The BOD of XYZ are unsure whether the assets and liabilities be recognized in fair value. They are also concerned with the following issues:
i) Should the adjustments to fair value be made in the consolidation worksheets or in the accounts of ABC Ltd.? What is the best?
ii) What equity accounts should be used when revaluing the assets, and should different equity accounts such as income (similar to recognition of an excess) be used in relation to recognition of liabilities? What is the best?
iii) Do these equity accounts remain in existence indefinitely, since they do not seem to be related to the equity accounts recognized by ABC Ltd itself?
Please help.