Share price at acquisition

This topic has 4 replies, 2 voices, and was last updated 4 years ago by alawi sayed.

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August 20, 2021 at 10:01 pm #632363
alawi sayed
Participant
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Hello Sir,

For calculating the net asset of subsidiary at acquisition do we have to use the share price(The par value of the share) or fare -market price at acquisition,

really confusing,

Thanks,
August 29, 2021 at 10:46 am #633344
P2-D2
Keymaster
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Hi,

The net assets of the subsidiary at acquisition are valued at fair value and is done in the net assets working. We take the book value of the assets using the share capital, share premium and retained earnings amounts before then accounting for any fair value adjustments. Fair vale adjustments are usually those in relation to PPE or a contingent liability.

Thanks
August 29, 2021 at 3:01 pm #633390
alawi sayed
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OK then the book value shares is at par value right,

Thanks,
September 1, 2021 at 7:03 pm #633846
P2-D2
Keymaster
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Effectively it is as the net assets is equal to the equity. We then make the fair value adjustments to adjust to the most up to date values of the assets/liabilities.

Thanks
September 1, 2021 at 8:51 pm #633878
alawi sayed
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Thanks
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