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Advanced Accounting, 5th Edition by Paul K. Chaney, Debra C. Jeter

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ALLOCATION AND DEPRECIATION OF DIFFERENCES BETWEEN IMPLIED AND BOOK VALUES

LEARNING OBJECTIVES

images Calculate the difference between implied and book values and allocate to the subsidiary's assets and liabilities.

images Describe FASB's position on accounting for bargain acquisitions.

images Explain how goodwill is measured at the time of the acquisition.

images Describe how the allocation process differs if less than 100% of the subsidiary is acquired.

images Record the entries needed on the parent's books to account for the investment under the three methods: the cost, the partial equity, and the complete equity methods.

images Prepare workpapers for the year of acquisition and the year(s) subsequent to the acquisition, assuming that the parent accounts for the investment alternatively using the cost, the partial equity, ...

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