Solution-Why might the fair value of the non-controlling

Why might the fair value of the non-controlling interest

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Reference no: EM132623350

T Inc has decided to purchase the shares of I Inc. for $300, 000 in Cash on July 1, 2019. On the date, the balance sheets of each of these companies were as follows:

	T Inc	I Inc
Cash and Short-Term Securities	$920,000	$200,000
Inventory	$150,000	$20,000
Plant and Equipment (net)	$330,000	$180,000
Total Assets	$1,400,000	$400,000
Current Liabilities	$420,000	$90,000
Bonds Payable	$700,000	$200,000
Common Shares	$180,000	$60,000
Retained Earnings	$100,000	$50,000
Total Liabilities and Equity	$1,400,000	$400,000

On that date, the fair values of Intron's assets and liabilities were as follows:

Cash/Short-Term Securities	$200,000
Plant and Equipment (net)	$400,000
Current Liabilities	$90,000
Bonds Payable	$210,000

Required:

Problem a) Prepare the Consolidated Balance Sheet on date of acquisition using the Identifiable Net Assets (INA) method

Problem b) How would your answer differ if you use the Fair Value Enterprise (FVE) method

Problem c) Why might the fair value of the non-controlling interest in a subsidiary on the date that it is acquired in a business combination not be proportionate to the price per share paid by the parent company to acquire control? How do the IFRS recognize this?

Reference no: EM132623350

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Why might the fair value of the non-controlling interest

Reference no: EM132623350

Reference no: EM132623350

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