Question
In addition, the investor provided to the seller contingent consideration with a fair value of $200 and the investor paid an additional $80 of transaction
In addition, the investor provided to the seller contingent consideration with a fair value of $200 and the investor paid an additional $80 of transaction costs to an unaffiliated third party. The contingent consideration is not a derivative financial instrument. The fair values are measured in accordance with FASB ASC 820: Fair Value Measurement.
Assume the net assets transferred from the investee do not qualify as a business, as that term is defined in FASB ASC Master Glossary. At what amount will the Licenses be reported in the financial statements of the acquiring company on January 1, 2019?
Select one:
$763
$721
$791
$700
Acquiring net assets that constitute a business Assume that on January 1, 2019 an investor company paid $1,980 to an investee company in exchange for the following assets and liabilities transferred from the investee company: Asset (Liability) Estimated Fair Value Production equipment $500 Factory 800 Licenses 700Step by Step Solution
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