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PREMIUM PAYABLE ON ACQUISITION

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › PREMIUM PAYABLE ON ACQUISITION

  • This topic has 7 replies, 3 voices, and was last updated 8 years ago by John Moffat.
Viewing 8 posts - 1 through 8 (of 8 total)
  • Author
    Posts
  • January 25, 2017 at 8:48 pm #369573
    goodgirlone
    Member
    • Topics: 14
    • Replies: 20
    • ☆

    Hi John

    Love your lectures, but regrettably I can’t seem shake this P4.
    need to know if my understanding of premium payable on acquisition is ok.

    I understand the premium payable to be equal to or lesser than the additional value created/earned through acquisition.

    so if company A value $300.00
    company B Value $400.00

    and company Ab Values $1000.00

    then premium should be equal or lesser than $300.00

    I anxiously await your reply.

    January 26, 2017 at 6:50 am #369605
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54680
    • ☆☆☆☆☆

    What you have written is correct 🙂

    January 26, 2017 at 3:50 pm #369777
    goodgirlone
    Member
    • Topics: 14
    • Replies: 20
    • ☆

    thank you.

    January 27, 2017 at 7:38 am #369893
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54680
    • ☆☆☆☆☆

    You are welcome 🙂

    January 28, 2017 at 9:40 am #370033
    numera
    Member
    • Topics: 30
    • Replies: 44
    • ☆☆

    hi sir ,
    please could you explain how the premium would be equal or “less” than$ 300.
    why is there a possibility of being less?

    January 29, 2017 at 8:08 am #370090
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54680
    • ☆☆☆☆☆

    Because why should they give all of the gain (premium) to the shareholders in the company being acquired?? The acquiring company will want to have some benefit 🙂

    January 29, 2017 at 9:38 am #370116
    numera
    Member
    • Topics: 30
    • Replies: 44
    • ☆☆

    oh right ,
    that was very simple,got it thanks.

    January 29, 2017 at 4:30 pm #370148
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54680
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
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