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Quick Sheets/FAR/Business Combinations & Consolidations

FAR — Quick Sheet

Business Combinations & Consolidations

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One-minute revision

  • Goodwill = Consideration paid + FV of NCI − FV of identifiable net assets acquired
  • Negative result → bargain purchase gain, recognized in earnings (after re-checking measurements)
  • NCI measured at fair value, shown within consolidated equity, separate from parent's equity
  • Acquisition costs (legal, advisory) → expensed as incurred, not capitalized into goodwill
  • Consolidation eliminates intercompany balances and unrealized intercompany profit