Consolidating industries 2016 100 dating friends
When the amount of stock purchased is between 20% and 50% of the common stock outstanding, the purchasing company’s influence over the acquired company is often significant.
The deciding factor, however, is significant influence.
It was possibly in fact the first recorded major industry consolidation In business, consolidation or amalgamation is the merger and acquisition of many smaller companies into a few much larger ones.
In the context of financial accounting, consolidation refers to the aggregation of financial statements of a group company as consolidated financial statements.
Treatment to the acquired company: The acquired company records in its books the receipt of the payment from the acquiring company and the issuance of stock.
The VOC was formed in 1602 from a government-directed consolidation/amalgamation of several competing Dutch trading companies (the so-called voorcompagnieën).
Such disclosures are: When a company purchases 20% or less of the outstanding common stock, the purchasing company’s influence over the acquired company is not significant.
(APB 18 specifies conditions where ownership is less than 20% but there is significant influence).
If the acquired company is liquidated then the company needs an additional entry to distribute the remaining assets to its shareholders.
Treatment to the purchasing company: When the purchasing company acquires the subsidiary through the purchase of its common stock, it records in its books the investment in the acquired company and the disbursement of the payment for the stock acquired.