Consolidated and consolidating
Liquidating dividends : Liquidating dividends occur when there is an excess of dividends declared over earnings of the acquired company since the date of acquisition.Regular dividends are recorded as dividend income whenever they are declared.Treatment to the acquired company: The acquired company records in its books the elimination of its net assets and the receipt of cash, receivables or investment in the acquiring company (if what was received from the transfer included common stock from the purchasing company).
Under the Halsbury's Laws of England, 'amalgamation' is defined as "a blending together of two or more undertakings into one undertaking, the shareholders of each blending company, becoming, substantially, the shareholders of the blended undertakings.
There may be amalgamations, either by transfer of two or more undertakings to a new company, or to the transfer of one or more companies to an existing company".
(APB 18 specifies conditions where ownership is less than 20% but there is significant influence).
The purchasing company uses the cost method to account for this type of investment.
If the parent and NCI pay more than the fair market value of the net assets (assets less liabilities), the excess amount is posted a goodwill asset account, and goodwill is moved into an expense account over time.
A consolidation eliminates any transactions between the parent and subsidiary, or between the subsidiary and the NCI.Technical traders believe that a breakout above the resistance price means that stock price is increasing further, so the trader buys the stock.On the other hand, a breakout below the support level indicates that the stock price is moving even lower, and the trader sells the stock.FASB 141 Disclosure Requirements: FASB 141 requires disclosures in the notes of the financial statements when business combinations occur.Such disclosures are: When a company purchases 20% or less of the outstanding common stock, the purchasing company’s influence over the acquired company is not significant.Treatment to the purchasing company: When the purchasing company acquires the subsidiary through the purchase of its common stock, it records in its books the investment in the acquired company and the disbursement of the payment for the stock acquired.