In this lesson, dive into the nuances of subsidiary fair value assessment and consolidation during the acquisition process. Nick Palazzolo, CPA, demystifies the concept of acquisition cost equating to the total fair value of the acquired entity, including the non-controlling interest. Delving into the mechanics, Nick clarifies how the fair value of a subsidiary is derived and the necessity of adjustments when there's a discrepancy between book value and fair value. He also explores the creation of goodwill during acquisitions, when a parent entity pays more than the book value of the subsidiary's net assets, and discusses the implications of bargain purchases on financial statements. Whether consolidating balances or reevaluating subsidiary worth, this lesson offers insightful guidance on key valuation considerations.
Lesson: Subsidiary Fair Value
In this lesson, dive into the nuances of subsidiary fair value assessment and consolidation during the acquisition process. Nick Palazzolo, CPA, demystifies the concept of acquisition cost equating to the total fair value of the acquired entity, including the non-controlling interest. Delving into the mechanics, Nick clarifies how the fair value of a subsidiary is derived and the necessity of adjustments when there's a discrepancy between book value and fair value. He also explores the creation of goodwill during acquisitions, when a parent entity pays more than the book value of the subsidiary's net assets, and discusses the implications of bargain purchases on financial statements. Whether consolidating balances or reevaluating subsidiary worth, this lesson offers insightful guidance on key valuation considerations.
Updated: Oct. 20, 2021 Create an account