What is the new equity value of bickley on its balance sheet

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Using fair value accounting for goodwill, under FAS 141R, determine the amount of Goodwill that "the acquiring company" enters on its balance sheet in the following situation: Oxford Corporation is acquiring the target Bickley, Inc. in a merger. Both companies are publicly listed. Bickley's market valuation in the merger is $9.0 billion, and its equity value on its balance sheet before any adjustments is $5.5 billion. During the merger process, Bickley's inventories will be written down by $500 million, and its receivables will be written down by $400 million. On the other hand, under fair value accounting, its plant and equipment will increase in value by $1.0 billion. Its patents and trademarks, however, will decrease in value by $500 million.

1. What is the new equity value of Bickley on its balance sheet?

Reference no: EM13805749

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