What is the fair market value of the ordinary shares issued

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Question - ABC company acquired the assets and assumed liabilities of XYZ Company on January 1, 2022 by paying P3,000,000 and issuing its own ordinary shares. The comparison of the acquirer's balance sheet before and after business combination transaction is as follows:


Balance sheet before Acquisition

Balance Sheet after Acquisition

Total Assets 

13,545,000

17,595,000

Total Liabilities 

3,760,000

?

Total SHE 

9,785,000

?

The fair value of the identifiable net asset of the acquiree is P4,835,000 and the book value of acquiree's liabilities amounting to P1,300,000 is lower compared to its fair value by P350,000. 

ABC company paid acquisition related costs amounting to P50,000.

Required - What is the fair market value of the ordinary shares issued by the acquirer?

Reference no: EM133153922

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