Questions from Advanced Accounting

Q: What is negative goodwill, and how is it accounted for?

What is negative goodwill, and how is it accounted for?

Q: Explain whether the historical cost principle is applied when accounting for negative

Explain whether the historical cost principle is applied when accounting for negative goodwill.

Q: How is the net income earned by a subsidiary in the year

How is the net income earned by a subsidiary in the year of acquisition incorporated in the consolidated income statement?

Q: In whose accounting records are the consolidation elimination entries recorded? Explain

In whose accounting records are the consolidation elimination entries recorded? Explain.

Q: Don Ltd. purchased 80% of the outstanding shares of Gunn

Don Ltd. purchased 80% of the outstanding shares of Gunn Ltd. Before the purchase, Gunn had a deferred charge of $10.5 million on its balance sheet. This item consisted of organization costs that were...

Q: How would the consolidation of a parent-founded subsidiary differ from

How would the consolidation of a parent-founded subsidiary differ from the consolidation of a purchased subsidiary?

Q: In the preparation of a consolidated balance sheet, the differences between

In the preparation of a consolidated balance sheet, the differences between the fair value and the carrying amount of the subsidiary's net assets are used. Would these differences be used if the subsi...

Q: With respect to the valuation of non-controlling interest, what

With respect to the valuation of non-controlling interest, what are the major differences among proprietary, parent company extension, and entity theories?

Q: How is the goodwill appearing on the statement of financial position of

How is the goodwill appearing on the statement of financial position of a subsidiary prior to a business combination treated in the subsequent preparation of consolidated statements? Explain.

Q: Under the entity theory and when using the implied value approach,

Under the entity theory and when using the implied value approach, consolidated goodwill is determined by inference. Describe how this is achieved, and comment on its shortcomings.