Cost of liquidating a company updating a mysql table with php
If other factors exist that reduce the influence or if significant influence is gained at an ownership of less than 20%, the equity method may be appropriate (FASB interpretation 35 (FIN 35) underlines the circumstances where the investor is unable to exercise significant influence).To account for this type of investment, the purchasing company uses the equity method.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.
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.
FASB 141 Disclosure Requirements: FASB 141 requires disclosures in the notes of the financial statements when business combinations occur.
Regular dividends are recorded as dividend income whenever they are declared.
Impairment loss : An impairment loss occurs when there is a decline in the value of the investment other than temporary.
The company does not need any entries to adjust this account balance unless the investment is considered impaired or there are liquidating dividends, both of which reduce the investment account.