ORALS (Balances at date of acquisition)
O2
R4
A4
L4
S3
O - Ordinary Shares
Ordinary shares before merger (Parent)
Newly issued shares
Ordinary shares at date of acquisition
xxx
xxx
xxx
R - Retained Earnings
RE before merger (Parent)
Gain on acquisition
Acquisition related costs
Cannot absorb (stock issuance costs
Retained earnings at date of acquisition
xxx
xxx
(xxx)
(xxx)
xxx
A - Assets
Assets before merger (Parent) at book value
Assets before merger (Subsidiary) at fair value
Cash paid by acquirer
Goodwill
Assets at date of acquisition
xxx
xxx
(xxx)
xxx
xxx
L - Liabilities
Liabilities before merger (Parent) at book value
Liabilities before merger (Subsidiary) at fair value
Contingent consideration liability
Unpaid transactions
Liabilities at date of acquisition
S - Shareholder's Equity
Share Premium before merger
Newly issued shares
Absorbable stock issuance costs
Shareholder's equity at date of acquisition
Stock issuance costs debit to:
1) Share premium - new
2) Share premium - old
3) Retained earnings
xxx
xxx
xxx
xxx
xxx
xxx
xxx
(xxx)
xxx
Separate FS
How parent records Investmen
Cost method
1) Purchase Price
Inv. In S
Cash
2) Profit sharing
3) Dividend Income
xxx
xxx
No Entry
Cash
xxx
Dividend Income
xxx
Consolidated Net Income
Parent
xxx
(dividend income)
(profit sharing)
Net income per books
(-) if cost method
(-) if equity method
(+/-) allocated amorization
Impairment loss on goodwill
NCI @ proportionate
NCI @ fv
RGP in BI - Downstream
URGP in EI -Downstream
RGP in BI - Upstream
URGP in EI -Upstream
(xxx)
xxx
(xxx)
Consolidated Retained Earnings
RE, Parent Dec. 31, 2015
CNI to Parent
Dividends Declared
RE, Parent Dec. 31, 2016
CNI to Parent
Dividends Declared
RE, Parent Dec. 31, 2017
Separate FS
w parent records Investment in S
Consolidated Retained
Equity method
Inv. In S
Cash
xxx
Inv. in S
xxx
Income from Inv.
Cash
Inv. In S
xxx
Retained Earnings, Parent, 12/31/17 (cost method)
Less: Unrealized gain on sale of equipment (downstr
Unrealized profit on ending inventory (downst
Adjusted Retained Earnings of Parent
xxx Retroactive adjustments to convert Cost Model to Eq
Method for purposes of consolidation/ Parent's sh
adjusted net increase in subsidiary's retained ear
xxx
Retained earnings of subsidiary (date of a
Less: Retained earnings of subsidiary 12/
Increase in RE since the date of acquisitio
xxx
income - cumulative dividends)
Accumulated amortization
UPEI (upstream) - 12/31/17
ated Net Income
x controlling interest
Retained Earnings, Parent, 12/31/17 (equity method)
Subsidiary
xxx
NC
x/(x)
(xxx)
xxx
(xxx)
1
10
(xx)
xx
Conso NI
NCI in NI
(1x.2)
To parent
Book Value of Stockholder's Equity of Subsidiary
Common Stock (Date of Acquisition)
Retained Earnings:
RE Date of acquisition
Net Income to present
Dividends to present
Book Value of Subsidiary at Present
Adjustment to fair value
Accumulated amortization of allocated excess
Fair Value of Stockholder's Equity of Subsidiary
NCI proportion
Non-Controlling Interest (partial goodwill)
Non-Controlling Interest in Full Goodwill
Non-Controlling Interest (Full)
d Retained Earnings
Consolidated Sha
xxx
xxx
(xxx)
xxx
xxx
(xxx)
xxx
Common Stock - Parent
Consolidated Retained Earnings
Noncontrolling Interes
Consolidated Shareholder's Equity
Consolidated Retained Earnings (Long cut)
t, 12/31/17 (cost method)
sale of equipment (downstream)
n ending inventory (downstream)
gs of Parent
to convert Cost Model to Equity
of consolidation/ Parent's share of
in subsidiary's retained earnings:
nings of subsidiary (date of acquisition)
d earnings of subsidiary 12/31/17
E since the date of acquisition (cumulative
cumulative dividends)
amortization
m) - 12/31/17
xxx
(xxx)
(xxx)
xxx
xxx
(xxx)
xxx
(xxx)
(xxx)
xxx
x%
t, 12/31/17 (equity method)/ Consolidated RE
xxx
xxx
NCI
r's Equity of Subsidiary
ck (Date of Acquisition)
E Date of acquisition
et Income to present
vidends to present
at Present
n of allocated excess
s Equity of Subsidiary
partial goodwill)
n Full Goodwill
xxx
xxx
xxx
(xxx)
xxx
xxx
xxx
(xxx)
xxx
x%
xxx
xxx
xxx
Consolidated Shareholder's Equity
xxx
xxx
xxx
xxx
