...EXAMPLE 3.1 A COMPANY LTD. Statement of Financial Position December 31, Year 1 Assets € 300,000 Liabilities Shareholders’ equity Ordinary stock (5,000 shares) Retained earnings € 120,000 100,000 80,000 € 300,000 B CORPORATION Statement of Financial Position December 31, Year 1 Assets € 88,000 Liabilities Shareholders’ equity Ordinary stock Retained earnings € 30,000 25,000 33,000 € 88,000 The fair values of B Corporation’s identifiable assets and liabilities at December 31, Year 1, are as follows: Assets Liabilities Net assets € 109,000 29,000 € 80,000 Illustration 1 Illustration 1 is an example of the acquisition of an enterprise’s assets for cash. Assume that on January 1, Year 2, A Company pays €95,000 in cash to B Corporation for all of its net assets. The acquisition cost is allocated as follows: Purchase price Fair value of net identifiable assets acquired Goodwill € 95,000 80,000 € 15,000 A company’s statement of financial position after the business combination is not a consolidated statement of financial position and would be as shown below. A COMPANY LTD. Statement of Financial Position January 1, Year 2 Assets (300,000 + 109,000 – 95,000) Goodwill € 314,000 15,000 € 329,000 Liabilities (120,000 + 29,000) Shareholders’ equity Ordinary stock (5,000 shares) Retained earnings € 149,000 Financial Accounting: Consolidations & Advanced Issues 100,000 80,000 Lesson 3 11 € 329...
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...250 B = 120,000 C = 115,000 D = 0 E = 50% x (10,000-15,250) = 0 15,250 – 2(120,000-115,000-0-0) = $5,250 $5,250 $10,000 Reserve [61.4] Spread over 5 years = 10,000 x 1/5 = $2,000 $2,000 $2,000 added to income, $8,000 spread over the next 4 years Question 3 PART A The shares of Kipper Ltd. do not qualify for the Capital Gains Deduction (CGD) because, under subsection 110.6(2.1), the corporation is not a Qualified Small Business Corporation (QSBC). There are three criteria for qualifying as a SBC under subsection 110.6(2.1): • Within 24 months preceding the transaction, the shares must not be held by anyone other than the individual owner or persons related to the individual owner. • Within 24 months preceding the transaction, more that 50% of the FMV of the assets in the corporation are used for business in Canada. • At the time of disposal, at least 90% of the FMV of the assets in the corporation are used for business in Canada. The shares of Kipper Ltd. do not qualify because they do not meet the 24-month 50% rule or the 90% rule. The treasury bills and shares of public corporations are not assets used for business,...
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...MODERN ADVANCED ACCOUNTING IN CANADA Seventh Edition Solutions to Self-Study Problems Chapter 4 Case 4-3 Factory Optical Distributors, Teaching Note* Purpose of the case The purpose of this case is to provide students with an opportunity to work with IFRS 10: Consolidated Financial Statements. The requirement is very directive, asking students to examine the specific clauses of a franchise agreement to determine if control exists. The answer is not immediately obvious, since ownership by the parent is much less than 50%, and there are no convertible preferred shares outstanding or signed shareholder agreements in place. Students must look further to decide whether the details of the franchise agreement give FOD (Burnaby) control over the franchisee. Control has the following three elements: (a) the investor has power over the investee to direct the relevant activities. (b) the investor has exposure, or rights, to variable returns from its involvement with the investee and (c) the investor has the ability to use its power over the investee to affect the amount of the investor’s returns. All three elements must be met for the investor to have control. Objectives and constraints Since FOD is a public company, audited financial statements are required. Thus, IFRSs must be used in reporting the franchise investments. Discussion Factory Optical Distributors (FOD) (Burnaby) owns 35% of the franchise operation’s outstanding common shares. No other equity instruments...
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...Question 2 A. 15th April, 2013 Canada Revenue Agency Dear Sir, I am writing this letter in response to details requested from Lea Lazarus concerning the details of transactions carried out in 2011 and 2012 as well as the tax treatment that was used for those transactions in the said same years. 2011 and 2012 Transactions Transaction details: 2011: Lea Lazarus owned 2,000 Class Z shares of Private Ltd. a CCPC at January 1, 2011. Lea had purchased these shares for $10 each in the year 1998 when the PUC was $5 per shares. Each of the shares was convertible into one Class Y share. Lea exercised her option on January 8, 2011 and converted 1,000 of the Class Z shares to 1,000 Class Y shares which had a FMV of $20 per share and a legal PUC of $8 per share. 2012: There was a mutual agreement conducted on June 28, 2012 where Private Ltd. redeemed 500 Class Y shares for $25 per share. Lea is the sole shareholder of the Class Z shares and also became the sole shareholder of the Class Y shares, which are not voting shares. Tax consequences: Under subsection 51(1), there is no disposition of shares. The ACB of the Class Y shares will be the same as the ACB of the Class Z shares, which is $10 per share. The 1,000 Class Z shares that have an ACB of $10,000 are converted to 1,000 Class Y shares that will have an ACB of $10,000. As a result of the conversion, the capital increased which resulted in a reduction in the PUC as per paragraph 51(3)(a). See details below...
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... Name of the college: Heramba Chandra College. Supervised by Name of the supervisor: JAYANTA GHOSH Name of the college: Heramba Chandra College. BACKGROUND: In 1494, a mathematically minded Veteran monk named Luca Pacioli published his “Summa de Arithmetica, Geometrica”, the first accounting textbook. It illustrated double-entry accounting, a system that makes the modern corporation manageable, even possible. Today, half a millennium later, Pacioli’s process, still pretty much intact, is being challenged like never before. Pacioli’s accounting system lets businesses keep track of changes in their assets. But this system deals primarily with tangible assets such as cash, inventory, investments, receivables, property, plant, and equipment. What go unrecorded are intangible assets such as quality of management, customer loyalty, information infrastructure, trade secrets, patents, goodwill, research, and, considered by some, the ultimate intangible, knowledge—a company’s intellectual capital. FASB chairman Edmund Jenkins attests, “The components of cost in a product today are largely R & D, intellectual assets, and services.” Professor James Quinn of Dartmouth College said, “Even in manufacturing, perhaps three-fourths of the value added derives from knowledge.’’ This refrain is echoed by...
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...AK/ADMS 4562.03 - CORPORATE TAX LECTURE 5 NOTES – last updated September 22, 2015 Tonight's Topics and Problem Set 1. QSBC capital gains exemption – Chapter 13 (13340 to 13355); s. 110.6 – see problems contained in these notes and Problem set (in separate document) 2. Income Splitting with Family Members as Shareholders 3. Corporate Attribution Rules - Chapter 13 (13390); S. 74.4 - see problems contained in these notes Recommended Questions: Chapter 13, Multiple Choice Questions 6 and 7 and Exercises 8 and 10 “$800,000” Lifetime Capital Gains Exemption (C.G.E.) The March 21, 2013 federal budget has increased the C.G.E. to $800,000 starting in 2014. This amount, i.e., $800,000, will be indexed to inflation, i.e., it will be further increased, in 2015 and thereafter based on the rate of inflation. In 2015 the C.G.E. is $813,600. The availability of the QSBC capital gains exemption is an advantage of incorporating a small business (a CCPC earning active business income in Canada). This same exemption, with a higher $1M exemption for dispositions on or after April 21, 2015, is also available for capital gains on certain farming and fishing assets. This course will not focus on family farms or fishing properties. Note that an $800,000 capital gains exemption is really a $400,000 taxable capital gains deduction...
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...Week 2 Solutions to Assigned Problems & cases for class discussion and take-up Case 3-3: Pool Inc. and Spartin Ltd. Objectives of the Case This case is intended to illustrate some of the different ways in which a business combination can be effected, and the fact that the form of the combination does not affect the substance of the transaction. The financial reporting for the transaction should follow the substance rather than the form. Analysis of Alternatives Prior to the combination, Pool has 1,600,000 common shares outstanding at a market price of $33 per share. Spartin has 1,200,000 common shares outstanding with a market price of $20 per share. In the combination, whatever the form, new shares will be issued in the ratio of two Spartin shares to one Pool share. The alternative exchanges would have the following results: Alternative 1: Pool will issue 600,000 new shares in exchange for Spartin’s shares. Pool will then have 2,200,000 shares outstanding, of which 1,600,000 (73%) will be held by the original shareholders of Pool and 600,000 (27%) will be held by the former shareholders of Spartin. Spartin will still have 1,200,000 shares outstanding, all of which will be owned by Pool Inc. Pool is the legal acquirer, and also is the acquirer in substance. Alternative 2: Spartin will issue 3,200,000 new common shares in exchange for Pool’s shares. After the exchange, Spartin will have 4,400,000 common shares outstanding, of which 3,200,000 (73%) will be...
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...0.3% Education 56.1% Corporate Giving in FY2012 86 76 Social Services Operating & Financial Review Fare Revenue ($m) 68 72 CEO's Message Company Overview & Background Group Performance Value Added & Economic Value Added Analysis SMRT and Our Shareholders SMRT Trains & SMRT Light Rail SMRT Buses SMRT Automotive Services SMRT Taxis SMRT Investments (Properties & Media) SMRT International & SMRT Engineering 749.6 9.4 213.1 800.5 10.1 76 220.4 82 84 527.1 569.9 86 92 96 FY2011 Train Bus FY2012 LRT 98 100 102 Financial Report 105 190 191 193 203 Financial Contents Group Properties & Interested Person Transactions Shareholding Statistics Notice of Annual General Meeting Proxy Form SMRT Corporation Ltd Annual Report 2012 1 Milestones 1987 Singapore’s first Mass Rapid Transit system (MRT) opens for service Train service from Yio Chu Kang to Toa Payoh commences Train service from Novena to Outram Park commences 1988 Train service from Tiong Bahru to Clementi commences Train service from Jurong East to Lakeside commences Train service from Kathib to Yishun commences 1989 Train service from Bugis to Tanah Merah commences Train service from Simei to Pasir Ris commences 1990 Train service from Bukit Batok to Choa Chu Kang commences Boon Lay station opens for passenger service 1996 Train service from Yishun to Choa Chu Kang commences 2003 Attains ISO 9001:2000 certification for achieving quality standards in the...
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...their companies are engaged in some kind of Corporate Restructuring. Major mergers and Acquisitions that took place in the recent past among the Indian Companies are…. ITC’s Merger of ITC Hotels, a listed subsidiary itself. Consolidation in the Tata Group, Videocon Group, Jindal Group etc Acquisitions of IPCL by Reliance Industries. The merger of NARMADA CHEMATUR PETROCHEMICAL PLANT (NCPL) with GUJARAT NARMADA VALLY FERTILIZER COMPANY (GNFC) which took place in the year 2006 was one of the recent mergers that took place in Gujarat. The project “Merger of with GNFC” deals with, The various reasons which lead to the merger, The regulatory processes to be followed by transferee and transferor company, Calculation of goodwill, Financial analysis of GNFC pre merger and post merger, Recommendations. INTRODUCTION In every organization’s life and in every economy’s life comes a time when growth development and expansion seems to reach a plateau. Across what is today called the developed countries, we are witnessing such a Cycle, where iconic brands, companies and institutions are being acquired and merged. And across the world into Asia, transition economies like India, China are pumping in billions of dollars to acquire a stake or control of some of the crown jewels of American/European Business & Industry. Until up to a couple of years back, the news that Indian companies having acquired American-European entities was very rare. However, this scenario...
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...Keiretsu Translated literally, it means headless combine Keiretsu is a Japanese word which, translated literally, means headless combine. It is the name given to a form of corporate structure in which a number of organisations link together, usually by taking small stakes in each other and usually as a result of having a close business relationship, often as suppliers to each other. The structure, frequently likened to a spider's web, was much admired in the 1990s as a way to defuse the traditionally adversarial relationship between buyer and supplier. If you own a bit of your supplier, reinforced sometimes by your supplier owning a bit of you, the theory says that you are more likely to reach a way of working that is of mutual benefit to you both than if your relationship is at arm's length. American trade officials, however, disliked Japan's keiretsu because they saw them as a restraint of trade. Jeffrey Garten, once under-secretary of commerce in charge of international trade and then dean of Yale School of Management, said that a keiretsu restrains trade “because there is a very strong preference to do business only with someone in that family”. Despite its government's disapproval, corporate America liked the idea. Jeffrey Dyer wrote in Harvard Business Review in 1996 that Chrysler had created “an American keiretsu”. The company's relationship with its suppliers, which were reduced in number from 2,500 in 1989 to 1,140 in 1996, had improved to such an extent, claimed...
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...Kinh Do Corporation Report of the Board of Management and Audited consolidated financial statements 31 December 2009 Kinh Do Corporation CONTENTS Pages REPORT OF THE BOARD OF MANAGEMENT 1-4 AUDITED CONSOLIDATED FINANCIAL STATEMENTS Independent auditors’ report 5-6 Consolidated balance sheet 7-8 Consolidated income statement 9 Consolidated cash flow statement 10 - 11 Notes to the consolidated financial statements 12 - 44 Kinh Do Corporation REPORT OF THE BOARD OF MANAGEMENT The Board of Management of Kinh Do Corporation (“KDC” or the “Company”) is pleased to present its report and the consolidated financial statements of KDC and its subsidiaries (“the Group”) as at and for the year ended 31 December 2009. THE GROUP The Group consisted of KDC and its subsidiaries and associates as follows: KDC is a shareholding company incorporated under the Law on Enterprise of Vietnam pursuant to the Business Registration Certificate (“BRC”) No. 4103001184 issued by the Ho Chi Minh City Department of Planning and Investment on 6 September 2002 and the following Amended BRC: Amended BRC: Date: The first amendment The second amendment The third amendment The fourth amendment The fifth amendment The sixth amendment The seventh amendment The eighth amendment The ninth amendment The tenth amendment The eleventh amendment 26 November 2002 22 September 2003 11 December 2003 3 August 2004 7 October 2004 11 May...
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...issuance cost could be accounted for by either; the offset method, where the issuance costs are deducted from the amount received in the sale of the shares; or by the retained earnings method, where the issuance cost are charged directly to retained earnings. c) $91,000 of goodwill was included in the acquisition costs. Acquisition Cost Fair Value of Bagley’s Net Assets (1,638,000 – 689,000) Goodwill d) Journal entry for Davis Inc. (cash): Current assets Property, plant & equipment Patents Goodwill Current liabilities Long-term debt Cash $1,040,000 949,000 91,000 507,000 1,053,000 78,000 91,000 273,000 416,000 1,040,000 Professional fees expense Cash 19,500 19,500 e) Davis Inc. is the acquirer because even with the additional 130,000 shares issued, they still hold over 50% of the total outstanding shares and thus maintain control over strategic, investment, financial and operating activities. f) Journal entry for Davis Inc. (shares): Current assets Property, plant & equipment Patents Goodwill Current liabilities Long-term debt Common shares (130,000 x $8) 507,000 1,053,000 78,000 91,000 273,000 416,000 1,040,000 Professional fees expense Cash 19,500 19,500 Common shares Cash 6,500 6,500 g) Bagley Corporation Statement of Financial Position August 1, Year 4 Common shares in Davis Inc. $1,040,000 Common shares Retained earnings (520,000 + 338,000) $182,000 858,000 $1,040,000 Gain on sale: 1,040,000 – (1,365,000 - 390,000 - 273,000) = 338,000 Question 2: a) Cost of 90%...
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...Definition of 'Goodwill' An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company is purchased by another company. In an acquisition, the amount paid for the company over book value usually accounts for the target firm's intangible assets. Investopedia explains 'Goodwill' Goodwill is seen as an intangible asset on the balance sheet because it is not a physical asset such as buildings and equipment. Goodwill typically reflects the value of intangible assets such as a strong brand name, good customer relations, good employee relations and any patents or proprietary technology. Definition of 'Negative Goodwill' A gain occurring when the price paid for an acquisition is less than the fair value of its net tangible assets. Negative goodwill implies a bargain purchase. Negative goodwill may be listed as a separate line item on the acquiring company's balance sheet and may be considered income. For the purchased company, negative goodwill often indicates a distress sale, and the unfavorable sale conditions lead to a depressed sale price. Investopedia explains 'Negative Goodwill' Negative goodwill is based on the concept of goodwill, an intangible asset that represents the worth of a company's brand name, patents, customer base and other items that are difficult to price but that help to make a company valuable. Most of the time, a company will be purchased for more than the value of its tangible assets, and...
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...Disclaimer This PDF is a section of the Unilever Annual Report & Accounts and Form 20-F 2003 provided to Unilever's shareholders. It does not contain sufficient information to allow a full understanding of the results of the Unilever Group and the state of affairs of Unilever N.V., Unilever PLC or the Unilever Group. For further information the Unilever Annual Report & Accounts and Form 20-F 2003 should be consulted. Certain sections of the Unilever Annual Report & Accounts and Form 20-F 2003 have been audited. Sections that have been audited are set out on pages 73 to 125, 131 to 147 and 149 to 150. The auditable part of the Directors' Remuneration report as set out on page 68 has also been audited. The maintenance and integrity of the Unilever website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters. Accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially placed on the website. Legislation in the United Kingdom and the Netherlands governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Disclaimer Except where you are a shareholder, this material is provided for information purposes only and is not, in particular, intended to confer any legal rights on you. The Annual Report & Accounts and Form 20-F does not constitute an invitation to invest in Unilever...
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...| | | Form 10-KORACLE CORP - ORCLFiled: June 29, 2007 (period: May 31, 2007)Annual report which provides a comprehensive overview of the company for the past year| | | Table of Contents| | UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K | | | x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934| For the fiscal year ended May 31, 2007| OR| o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934| Commission file number: 000-51788 Oracle Corporation (Exact name of registrant as specified in its charter) | | | Delaware| |54-2185193| (State or other jurisdiction of incorporation or organization)| |(I.R.S. employer identification no.)| 500 Oracle Parkway Redwood City, California 94065 (Address of principal executive offices, including zip code) (650) 506-7000 (Registrant’?s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: | | | Title of Each Class| |Name of Each Exchange on Which Registered| Common Stock, par value $0.01 per share| |The NASDAQ Stock Market LLC| Preferred Stock Purchase Rights| |The NASDAQ Stock Market LLC| Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES x ...
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