Accounting for Business Combinations

Course Description:

This course includes a rigorous study of combination accounting and display matters. It enables students to know the reasons for business combinations & techniques for arranging them, how to prepare consolidated financial statements, and accounting for intercompany transactions.

The course represents an intensive study of selected areas of advanced accounting theory. Areas covered include business combinations, foreign exchange, interim reporting, segment accounting, and partnerships.

This course is a comprehensive study of business combinations, the equity and cost methods of accounting for investments in common stock, and consolidated financial statement preparation. In addition this course explores accounting theory as applied to special problems such as accounting for partnerships, segment and interim reporting, international accounting issues including foreign currency financial statement translation and state and local governmental accounting are introduced in this course.

Course Learning Outcomes:

Upon successful completion of this course, students will be able to:

1. Identify the concept and purpose of consolidated financial statements.
2. Describe the basic reporting standards for consolidated statements.
3. Distinguish between the cost and equity methods of valuing a parent’s investment in a subsidiary.
4. Explain the way to prepare a full set of consolidated statements at reporting dates subsequent to a subsidiary’s creation.
5. Identify the various concepts that exist for dealing with a non-controlling interest.
6. Describe the change in the basis of accounting concept and the nature of and controversy surrounding goodwill.
7. Explain the way to calculate the acquirer’s cost of an acquisition and to allocate the acquirer’s cost to the various tangible and intangible assets and liabilities of the acquired business.
8. Describe the difference between non-push-down and push-down accounting.
9. Identify the way to achieve the purchase method accounting results in post-acquisition periods-100%-ownership and non-100%-ownership situations.
10. Explain the operational importance of intercompany transactions.
11. Describe the nature and identify the variety of intercompany transactions.
12. Explain the formation and describe the operation of partnerships.
13. Explain the way to treat changes of ownership and describe the legal ramification in partnerships.