Question

Macheath inc. bought 60% of the outstanding common stock of nomes inc. in an acquisition business combination that resulted in the recognition of goodwill. nomes owned a piece of land that cost $250,000 but was worth $600,000 at the date of acquisition. what value would be attributed to this land in a consolidated balance sheet at the date of acquisition?

Answer 1

The value that would be attributed to this land in a consolidated balance sheet at the date of acquisition is $600,000.00

During mergers or consolidations, assets like land, buildings, and machinery should be evaluated to get its actual adjusted value based on its book value, fair market value, good will, and other factors that may directly affect the valuation of the asset.

An asset's value on the date of acquisition should be its recorded value.