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In January 2019, Roosevelt Corporation acquired Stanford Company in a business acquisition. By early April 2019 (almost 3 months from the date of acquisition), the
In January 2019, Roosevelt Corporation acquired Stanford Company in a business acquisition. By early April 2019 (almost 3 months from the date of acquisition), the following issues came to light:
- As part of the acquisition, a piece of property planned for commercial real estate development was valued at $5,000,000. Two months after the acquisition date, it was determined that oil existed under the property. The property value is now estimated to be $10,000,000.
In determining the goodwill from the acquisition, Roosevelt had used
a $5,000,000 value for the land
Should Roosevelt leave these numbers unchanged, or should it re-examine these valuations in light of subsequent events?
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