How should phoenix account for its acquisition

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Reference no: EM132020831

Case - Who's in Charge?

Background - Professor X teaches biology at the University of ND (UND). As part of his employment agreement, UND has the rights to any intellectual property or technology developed by Professor X while he is employed by UND. During his employment at UND, Professor X founded several companies that use the technology he developed. This technology involves the use of non-embryonic (adult) human cells to reprogram genes within adult human cells into stem cells. Each company founded by Professor X is an affiliate of UND (for simplicity, UND) and has entered into an agreement whereby the company would license the technology developed by Professor X from UND in exchange for equity in the company and ongoing royalty payments to UND.

Required:

1. How should Phoenix account for its acquisition of 100 percent of equity interests in Darwin and Thunderbird: as a merger of entities under common control or as a business combination?

2. If the merger of Phoenix, Darwin, and Thunderbird is a business combination, which entity should be identified as the accounting acquirer?

Attachment:- Case.rar

Reference no: EM132020831

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