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Kepemimpinan: Pengantar
Dinnul Alfian Akbar
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A A business combinationbusiness combination occurs occurs when two or more companies join when two or more companies join
under common control.under common control.
KepemimpinanKepemimpinan Proses pengarahan dan pemberian pengaruh pada kegiatan-kegiatan dari sekelompok anggota yang saling berhubungan
tugasnya
KepemimpinanKepemimpinan
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Types of Business CombinationTypes of Business Combination
AA CompanyAA Company
BB Company
AA CompanyAA Company
(a) Statutory Merger
Only one of the combining companies survives and the other loses its separate identify.
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Types of Business CombinationTypes of Business Combination
AA CompanyAA Company
BB Company
(b) Statutory Consolidation
CC CompanyCC Company
Both the combining companies are dissolved and the assets and liabilities of both companies are
transferred to a newly created corporation.
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Types of Business CombinationTypes of Business Combination
AA CompanyAA Company
BB Company
(c) Stock Acquisition
AA CompanyAA Company
BB Company
One company acquires the voting shares of another company and the two
companies continue to operate separately.
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Record as Stock Acquisition
and Operate as Subsidiary.
No
Determining the Type of Business CombinationDetermining the Type of Business Combination
AA Company Invests in BB CompanyAA Company Invests in BB Company
Acquires Net Assets
Acquires Stock
AcquiredAcquiredCompanyCompany
Liquidated?Liquidated?Yes
Record as Statutory Merger
or Statutory Consolidation
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Traditional Business Combination AlternativesTraditional Business Combination Alternatives
AA Company Invests in BB CompanyAA Company Invests in BB Company
Acquired Net Assets
Acquired Stock
Net AssetsRecorded atBook Value
Yes
InvestmentRecorded atBook Value
Yes
InvestmentRecorded atFair Value
No
Net AssetsRecorded atFair Value
NoQualifyas Pooling?
Qualifyas Pooling?
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Dinnul Alfian Akbar Kepemimpinan.
On January 1, 20X1, Point Corporation purchases all the assets and liabilities of Sharp Company in a
statutory merger by issuing to Sharp 10,000 shares of $10 par value common stock. The shares issued have a total market value of $600,000. Point incurs
legal and appraisal fees of $40,000 (for a total purchase price of $640,000) in connection with the
combination and stock issue costs of $25,000.
Fair value of stock issued $600,000 Stock issue costs -25,000Recorded amount of stock $575,000
Point Corporation IllustrationPoint Corporation Illustration
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Point Corporation IllustrationPoint Corporation Illustration
Assets, Liabilities, and Equities Book Value Fair Value
Cash and Receivables $ 45,000 $ 45,000Inventory 65,000 75,000Land 40,000 70,000Buildings and Equipment 400,000 350,000Accumulated Depreciation (150,000Patent 80,000Total Assets $400,000 $620,000Current Liabilities $100,000 $110,000Common Stock ($5 par) 100,000Additional Paid-In Capital 50,000Retained Earnings 150,000Total Liabilities and Equities $400,000Fair value of Net Assets $510,000
)
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Cost of Investment$640,000
Fair value of net identifiable assets $510,000
Total differential$340,000
Excess of cost over fair value of net identifiable assets
$130,000
Excess of fair value over book value of net identifiable assets
$210,000Book value of net identifiable assets $300,000
Point Corporation IllustrationPoint Corporation Illustration
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Point Corporation IllustrationPoint Corporation Illustration
The $40,000 of other acquisition costs associated with the combination and the $25,000 of stock
issue costs may be recorded in separate temporary “suspense” accounts as incurred:
Deferred Merger Costs 40,000Cash40,000
Record costs related to purchase of Sharp Company.Deferred Stock Issue Costs 25,000
Cash25,000
Record costs related to issuance of common stock.
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Cash and Receivables 45,000Inventory 75,000Land 70,000Buildings and Equipment 350,000Patent 80,000
Current Liabilities 110,000Common Stock 100,000Additional Paid-In Capital 475,000Deferred Merger Costs 40,000Deferred Stock Issue Costs 25,000
Record purchase of Sharp Company.
fair valuefair valuefair valuefair valuefair value
fair valuebook valuefair value
Goodwill 130,000
Point Corporation IllustrationPoint Corporation Illustration
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Entries Recorded by Acquired CompanyEntries Recorded by Acquired Company
Investment in Point Stock 600,000Current Liabilities 100,000Accumulated Depreciation 150,000
Cash and Receivables45,000Inventory65,000Land40,000Building and Equipment400,000Gain on Sale of Net Assets300,000
Record transfer of assets to Point Corporation.
The fair value of Point Corporation shares is recognized by Sharp at the time of the
exchange, and a gain of $300,000 is recorded.
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Entries Recorded by Acquired CompanyEntries Recorded by Acquired Company
Common Stock 100,000Additional Paid-In Capital 50,000Retained Earnings 150,000Gain on Sale of Net Assets 300,000
Investment in Point Stock600,000
Record distribution of Point Corporation stock.
The distribution of Point Corporation stock is recorded.
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Recording GoodwillRecording Goodwill
Because expenditures for “self-developed” goodwill often are not distinguishable from
current operating costs, such expenditures are required to be expensed as incurred.
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Recording GoodwillRecording GoodwillHowever, when goodwill is purchased
in connection with a business combination, the amount is viewed as
objectively determinable and is capitalized.
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Recording GoodwillRecording GoodwillIn a purchase-type business combination,
the cost of goodwill purchased is measured as the excess of the total
purchase price over the fair value of the net identifiable assets acquired.
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Cost of investment$460,000
Fair value of net identifiable assets $510,000
Total differential$160,000
Excess of fair value of net identifiable assets over cost
$50,000
Book value of net identifiable assets $300,000
Negative GoodwillNegative Goodwill
Excess of fair value over book value of net identifiable assets
$210,000
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Combination Effected through Purchase of StockCombination Effected through Purchase of Stock
Point Corporation exchanges 10,000 shares of its stock with a total market value of $600,000 for all
the shares of Sharp Company in a purchase transaction and incurs and records merger costs of
$40,000 and stock issue costs of $25,000.
Investment in Sharp Stock 640,000Common Stock100,000Additional Paid-In Capital475,000Deferred Merger Costs40,000Deferred Stock Issue Costs25,000
Record purchase of Sharp Company Stock.
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1. The name and a brief description of the acquired company.
2. A statement that purchase treatment has been used.
3. Information on the total cost incurred in making the purchase.
4. The portion of the year for which operating results of the acquired company have been included.
5. Information on any contingent payments or commitments and their accounting treatment.
Disclosure RequirementsDisclosure Requirements
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Operating results as if the acquisition had been made at the start of the period.
When comparative financial statements are presented, operating results for the preceding period as if the acquisition had occurred at the start of that period.
Pro Forma Financial StatementsPro Forma Financial Statements
As a minimum, supplemental
information should be provided to show…
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The FASB has decided to eliminate pooling of interest as
an acceptable method for accounting for business
combinations.
However, an examination of this method is warranted because the
effects of past poolings will affect financial statements for many
years in the future.
Pooling of InterestPooling of Interest
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Pooling of Interest (Point’s Books)Pooling of Interest (Point’s Books)
On January 1, 20X1, in a statutory merger accounted for as a pooling of interests, Point Corporation issued 10,000
shares of its $10 par common stock in exchange for all the assets and liabilities of Sharp Company.
Cash and Receivables 45,000Inventory 65,000Land 40,000Buildings and Equipment 400,000
Accumulated Depreciation 150,000Current Liabilities 100,000Common Stock (Point Corporation) 100,000Additional Paid-In Capital 50,000Retained Earnings 150,000
Record pooling-type merger with Sharp.
Recorded atRecorded atbook valuebook value
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Pooling of Interest (Sharp’s Books)Pooling of Interest (Sharp’s Books)
Investment in Point Stock 300,000Current Liabilities 100,000Accumulated Depreciation 150,000
Cash and Receivables 45,000Inventory 65,000Land 40,000Buildings and Equipment 400,000
Record transfer of assets to Point Corporation.
On January 1, 20X1, in a statutory merger accounted for as a pooling of interests, Point Corporation issued 10,000
shares of its $10 par common stock in exchange for all the assets and liabilities of Sharp Company.
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Pooling of Interest (Sharp’s Books)Pooling of Interest (Sharp’s Books)
The distribution of Point Corporation shares and the liquidation of Sharp are
recorded on Sharp’s books.
Common Stock 100,000Additional Paid-In Capital 50,000Retained Earnings 150,000
Investment in Point Stock 300,000 Record distribution of Point Corporation stock.
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Differences in Total Par ValueDifferences in Total Par Value
Combined Stockholders’ Equity
Capital stock
Additional paid-in capital
Retained earnings
Case 1Case 1
$400,000
$80,000
$370,000
The like stockholders’ equity accounts of the combining companies are summed without adjustment when the total par
values of the shares exchanged are equal.
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Net Assets of Sharp Company 300,000Common Stock 100,000Additional Paid-In Capital 50,000Retained Earnings 150,000
Differences in Total Par ValueDifferences in Total Par Value
Case 1Case 1
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Differences in Total Par ValueDifferences in Total Par Value
Combined Stockholders’ Equity
Capital stock
Additional paid-in capital
Retained earnings
Case 2Case 2
$380,000
$100,000
$370,000
When the total par value of the shares issued is less than the par value of the shares
replaced, the difference is reflected as an increase in additional paid-in capital.
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Net Assets of Sharp Company 300,000Common Stock 80,000Additional Paid-In Capital 70,000Retained Earnings 150,000
Differences in Total Par ValueDifferences in Total Par Value
Case 2Case 2
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Differences in Total Par ValueDifferences in Total Par Value
Combined Stockholders’ Equity
Capital stock
Additional paid-in capital
Retained earnings
Case 3Case 3
$440,000
$40,000
$370,000
When the total par value of the shares issued is greater than the par value of the shares acquired, the difference is reflected as a reduction in additional paid-in capital.
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Net Assets of Sharp Company 300,000Common Stock 140,000Additional Paid-In Capital 10,000Retained Earnings 150,000
Differences in Total Par ValueDifferences in Total Par Value
Case 3Case 3
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Differences in Total Par ValueDifferences in Total Par Value
Combined Stockholders’ Equity
Capital stock
Retained earnings
Case 4Case 4
$510,000
$340,000
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Differences in Total Par ValueDifferences in Total Par Value
Combined Stockholders’ Equity
Capital stock
Retained earnings
Case 4Case 4
$510,000
$340,000
When Point issues 21,000 shares, the $210,000 par value of the shares issued
exceeds the $100,000 par value of Sharp’s shares retired by enough to eliminate the
combined additional paid-in capital and part of the combined retained earnings.
Par value of Point’s shares issued $210,000 Par value of Sharp’s shares replaced (100,000Increase in total par value $110,000 Additional paid-in capital of Sharp (50,000Additional paid-in capital of Point (30,000Reduction in combined retained earnings $ 30,000
)
))
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Net Assets of Sharp Company 300,000Additional Paid-In Capital 30,000
Common Stock 210,000Retained Earnings 120,000
Differences in Total Par ValueDifferences in Total Par Value
Case 4Case 4
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Disclosure Requirements--PoolingDisclosure Requirements--Pooling
1. The name and a brief description of the acquired company.
2. A statement that pooling treatment has been used.3. Description and number of shares issued in the
exchange.4. For the separate companies, revenue, extraordinary
items, net income, changes in stockholders’ equity, and the amount and handling of intercompany transactions for the portion of the current period before the date of the combination.
MoreMore
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Disclosure Requirements--PoolingDisclosure Requirements--Pooling5. A description of any adjustments of net assets or
income related to changes in accounting procedures.6. A description of the impact of a change in the fiscal
period of a combining company.7. A reconciliation of revenue and income previously
reported by the stock-issuing company with the restated amounts reported for those periods for the combined company.
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Chapter OneChapter One
The The EndEnd
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