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Why total purchase price paid in acquiring a subsidiary co

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Reference no: EM132642668

Problem (a) Identify and explain the reasons why total purchase price paid in acquiring a subsidiary company is rarely equal to its total net assets/equity as reported in its audited financial statements.

You may include the following in your discussion:

  • Financial statement line items of assets/liabilities that would/would not usually give rise to the difference and the reasons thereon.
  • Any other reasons.

Problem (b) Illustrate the accounting concepts that deal with the difference in the purchase price and total net assets/equity of the subsidiary acquired in the preparation and presentation of consolidated financial statements.

Reference no: EM132642668

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