ACCOUNTING FOR BUSINESS

COMBINATIONS
(Advanced Accounting 2)
LECTURE AID

2020

ZEUS VERNON B. MILLAN

Chapter 6 CONSOLIDATED FS (Part 3)

 
Learning Objectives

• Account for the effect of impairment of

goodwill on the consolidated financial
statements.
• Determine the effects of changes in
ownership interests that (a) result in loss
of control and (b) does not result in loss of
control. ACCOUNTING FOR BUSINESS
COMBINATIONS (Advanced
Accounting 2) - (by: MILLAN)
Impairment of goodwill

ACCOUNTING FOR BUSINESS

COMBINATIONS (Advanced
Accounting 2) - (by: MILLAN)
Changes in ownership interest not resulting to loss
of control

• If the parent’s ownership interest in a subsidiary changes

but does not result to loss of control, the change is
accounted for as an equity transaction.
• NO GAIN OR LOSS is recognized from the transaction.

ACCOUNTING FOR BUSINESS

COMBINATIONS (Advanced
Accounting 2) - (by: MILLAN)
Loss of control

ACCOUNTING FOR BUSINESS

COMBINATIONS (Advanced
Accounting 2) - (by: MILLAN)
Loss of control (Continuation)

OR

ACCOUNTING FOR BUSINESS

COMBINATIONS (Advanced
Accounting 2) - (by: MILLAN)
 APPLICATION OF CONCEPTS
 

PROBLEM 2: FOR CLASSROOM DISCUSSION

ACCOUNTING FOR BUSINESS COMBINATIONS (Advanced Accounting 2) -

(by: MILLAN)
 OPEN FORUM
QUESTIONS????
REACTIONS!!!!!

ACCOUNTING FOR BUSINESS COMBINATIONS (Advanced Accounting 2) - (by:

MILLAN)
 END
ACCOUNTING FOR BUSINESS COMBINATIONS (Advanced Accounting 2) - (by:
MILLAN)