Mergers


F

Fundad

Trevi is a publically-traded company. Pisa ia privately-held company.
Trevi acquired 100% of Pisa. Trevi then sold 52% to 6 smaller companies at
a gain.

What should Trevi do--
1. Record the transaction as an asset acquisition and record a gain on the
subsequent disposition in Trevi's December 31 financial statements.
2. Do not record a gain on the sale in Trevi's December financial
statemnets. Record sale proceed against the carrying valu of Trevi's
investment in Pisa.
 
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