Accounting for Mergers and Acquisitions
Autor: Bernardo Campelo • November 7, 2016 • Coursework • 1,903 Words (8 Pages) • 714 Views
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“Accounting for Mergers and Acquisitions”
IAS 22 | Business Combinations
IAS 38 | Brands recognition
International Financial Reporting Standards
Professor Cristina Neto de Carvalho
Outubro 2016
- The initial SE accounting value and the way intangible assets were then recognized
The Shareholders’ Equity value is basically the difference between the firms’ assets and liabilities. It is also called Book Value of equity and it represents an accounting measure of the net worth of the firm. The Shareholders’ equity has to be taken carefully since it doesn’t represent the true value of a firm. First, many of the assets listed on the balance sheet are valued based on their historical cost rather than the true value today. Secondly, assets such as expertise of the firms’ employees, firm’s reputation and quality of management team are not captured in the balance sheet.
Stockholders’ Equity | 2004 | 2003 |
Common stock,par value $1 per share | - | - |
Authorized: 2,320 shares,Issued 2004– 1,382 shares | 1.382 | 1.374 |
Additional paid in capital | 1.521 | 1.273 |
Earnings Reinvested in the business | 8.736 | 7.333 |
Accumulated other comprehensive loss | - 760 | - 1.088 |
Treasury stock,at cost:2004–392 shares,2003-367 shares | - 7.683 | - 6.665 |
Deferred stock-based compensation | - | - 3 |
Total Stockholders’ Equity | 3.196 | 2.224 |
As you can see Gillette Company follows the US GAAP. At the Gillette statement of financial position you can identify all the requires component of the US GAAP such as Common Stock, Authorized shares, Issued shares, Additional paid-in capital, Earnings reinvested Accumulated other comprehensive loss, Treasury stock, Deferred stock-based compensation and Total stockholders’ equity. The most relevant difference between IFRS and US GAAP is the minority interests which are included at the shareholders’ Equity of an European company whereas separated from the Shareholders’ equity in a US company.
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