How are these value changes reported

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Reference no: EM133654308

Question: Quality Inc. acquires Rekless Company for $100 million in cash at the beginning of its accounting year, and records the acquisition as a merger. At the date of acquisition, Rekless' reported net assets have a fair value of $15 million and previously unreported intangible assets, appropriately recognized per ASC 805, have a fair value of $10 million for technology, and $10 million for favorable leases. Six months after the acquisition, it is determined that the technology has a value of $50 million, but the favorable leases are worthless. How are these value changes reported, if both represent changes in conditions occurring subsequent to the acquisition?

Reference no: EM133654308

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