Question 2 · M&A accountingAssociatePlus
A buys 80% of B for £96 in cash. Fair values equal book values, and goodwill is measured on A’s share only.
Balance sheet of A
| Cash | 200 |
| Other assets | 300 |
| Total assets | 500 |
| Debt | 100 |
| Shareholders’ equity | 400 |
| Total liabilities & equity | 500 |
Balance sheet of B
| Cash | 20 |
| PP&E | 80 |
| Total assets | 100 |
| Debt | 30 |
| Shareholders’ equity | 70 |
| Total liabilities & equity | 100 |
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