Term
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Definition
| The grouping of different comapnies in a parent/subsidiary relationship |
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Term
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Definition
| A company which has a controling interest in another company |
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Term
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Definition
| A company which is controlled by another company |
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Term
| Topic 805 (Business Combinations) |
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Definition
| FASB codification that provides guidance for business combinations using the Acquisition Method. |
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Term
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Definition
| Method used to measure and asses business activity that embraces fair-value. |
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Term
| Topic 810 (Consolidation) |
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Definition
| FASB codification that provides guidance on circumstances that require the preparation of consolidated financial reports & other issues. |
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Term
| Reasons to create a business combination (1/2) |
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Definition
- Vertical integration of one firm's output and another firm's distribution or further processing.
-Cost savings through elimination of duplicate facilities and staff
-Quick entry for new and existing products into domestic and foreign markets |
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Term
Reasons to create a business combination
(2/2) |
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Definition
- Economics of scale allowing greater efficiency and negotiating power
- The ability to access financing at more attractive rates
- Diversification of business risk |
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Term
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Definition
| When a company has control over a vast network of different businesses |
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Term
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Definition
| When one company obtains the assets and liabilities of another or 100% of the companies equity. The purchased company ceases to exist and is simply absorbed by the purchasing company. |
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Term
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Definition
| When two or more companies transfer their assets or capital stock to a newly formed company and the old companies cease to exit. |
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Term
| Topic 810 (Consolidation) |
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Definition
| FASB codification that provides guidance on circumstances that require the preparation of consolidated financial reports & other issues. |
|
|
Term
| Reasons to create a business combination (1/2) |
|
Definition
- Vertical integration of one firm's output and another firm's distribution or further processing.
-Cost savings through elimination of duplicate facilities and staff
-Quick entry for new and existing products into domestic and foreign markets |
|
|
Term
Reasons to create a business combination
(2/2) |
|
Definition
- Economics of scale allowing greater efficiency and negotiating power
- The ability to access financing at more attractive rates
- Diversification of business risk |
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Term
|
Definition
| When a company has control over a vast network of different businesses |
|
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Term
|
Definition
| When one company obtains the assets and liabilities of another or 100% of the companies equity. The purchased company ceases to exist and is simply absorbed by the purchasing company. |
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Term
|
Definition
| When two or more companies transfer their assets or capital stock to a newly formed company and the old companies cease to exit. |
|
|
Term
| Topic 810 (Consolidation) |
|
Definition
| FASB codification that provides guidance on circumstances that require the preparation of consolidated financial reports & other issues. |
|
|
Term
| Reasons to create a business combination (1/2) |
|
Definition
- Vertical integration of one firm's output and another firm's distribution or further processing.
-Cost savings through elimination of duplicate facilities and staff
-Quick entry for new and existing products into domestic and foreign markets |
|
|
Term
Reasons to create a business combination
(2/2) |
|
Definition
- Economics of scale allowing greater efficiency and negotiating power
- The ability to access financing at more attractive rates
- Diversification of business risk |
|
|
Term
|
Definition
| When a company has control over a vast network of different businesses |
|
|
Term
|
Definition
| When one company obtains the assets and liabilities of another or 100% of the companies equity. The purchased company ceases to exist and is simply absorbed by the purchasing company. |
|
|
Term
|
Definition
| When two or more companies transfer their assets or capital stock to a newly formed company and the old companies cease to exit. |
|
|
Term
| Topic 810 (Consolidation) |
|
Definition
| FASB codification that provides guidance on circumstances that require the preparation of consolidated financial reports & other issues. |
|
|
Term
| Reasons to create a business combination (1/2) |
|
Definition
- Vertical integration of one firm's output and another firm's distribution or further processing.
-Cost savings through elimination of duplicate facilities and staff
-Quick entry for new and existing products into domestic and foreign markets |
|
|
Term
Reasons to create a business combination
(2/2) |
|
Definition
- Economics of scale allowing greater efficiency and negotiating power
- The ability to access financing at more attractive rates
- Diversification of business risk |
|
|
Term
|
Definition
| When a company has control over a vast network of different businesses |
|
|
Term
|
Definition
| When one company obtains the assets and liabilities of another or 100% of the companies equity. The purchased company ceases to exist and is simply absorbed by the purchasing company. |
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Term
|
Definition
| When two or more companies transfer their assets or capital stock to a newly formed company and the old companies cease to exit. |
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Term
| Variable Interest Entity (VIE) |
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Definition
| When a company is controlled by contractual agreements that cause its profits to be surrender to another company without their being any ownership or asset transfer. |
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Term
| According to the FASB ASC Control is... |
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Definition
| The direct or indirect ability to determine the direction of management and policies through ownership, contracts, or otherwise. |
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Term
| The Acquisition Method involves measuring and recognizing... |
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Definition
-The consideration transferred for the acquired business and any non-controling interest
-The separately identified assets acquired and liabilities assumed
-Goodwill, or a gain from a bargain purchase |
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Term
| Three FASB approved methods of determining Fair Value |
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Definition
-Market Method
-Income Approach
-Cost Approach |
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Term
| Define Market Approach Fair Value |
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Definition
| When the value of an asset or liability is determined by other market transactions involving similar assets or liabilities. |
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Term
| Define Income Approach Fair Value |
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Definition
| An approach that relies on multiperiod estimates of future cash flows projected to be generated by an asset. Used to estimate the value of intangible assets and in process R&D. |
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Term
| Define Cost Approach Fair Value |
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Definition
| An approach that determines fair value by the cost to replace an asset with a new version. used for assets such as PP&E |
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Term
| Explain Goodwill and how it is determined |
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Definition
| Goodwill is an asset which is used as a plug figure between the the larger amount of consideration given and the smaller amount of the fair value of individual assets and liabilities. |
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Term
| Explain Gain on Bargain Purchase |
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Definition
| A plug figure that is considered an revenue. It is the difference in the larger individual fair value of the assets and liabilities received and the smaller consideration given. |
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Term
| Criteria for recognizing Intangible Asset |
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Definition
1. Does the intangible asset arise from contractual or other legal rights?
2. Is the intangible asset capable of being sold or otherwise separated from the acquired enterprise? |
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