ReSA The Review School of Accountancy R. Papa Cor. 5. H. Loyola St, sampetoc, Manila @ Tel Nos. 734-39-89 & 735-98-07 Advanced Financial Accounting & Reporting PFRS 3—Business Combination: Statutory Merger & Consolidation BUSINESS COMBINATION- Creating a Single Economic Entity Dusiness combmation reters in general to any » PaHONS are joined together through comnren ow PERS 3 Revised Business ¥ conditions in which combination 16 @ transachon oF even! iv wir! an acenmer abwaINs Control of one oF more Dusinesses A business defined as an integrated se’ of uct utes and assets that s capabie of Den. Conducted and managed tor the purpase of providing ¢ retin direct to investors of other Owne’s members of participants Scope of PERS 3 Revised Formation of ali type of joint arrangements (joint venture and x sonnt operations) - Acquisition of an asset ja grour of axens! thats not a business Combinations involving mutual entities By Contract alone (dual isting, stoping: = not within the scope: \ = within the scope “the scope exception only applies to the financial statements of Ihe joint venture joint operation ifselt and nat the accounting for the interest in a joint arian, the financial statements of a porly to the jamnt « Classification of BUSINESS COMBINATIONS geme! Business Combinations may be classified into three schemes 1, Based on the structure of the combina! 2. Based on the method used to accompish the commncion 3. Based on the accounting method used ‘Structure of the Combination (Business Point of View) Combinations are classified into thee types 1. Horizontal Integration = this type of Combinations cre Mat involves Companies within the same industry that have been previously conimetiten: # horizontal integration would occ Shell Company and Petron Company born inteqraied oi! companies. were to combine. 2. Vertical integration - this type of combinaien tok tween hwo Companies involv in the same industry but af different level. 11 corm" involves 0 combination of a company {and its suppliers or customers. For example - a ti: monufacturer and a tire distributor: Bally Shoe Company {a manufacturer of shoes and kustcns Department Store) 3. Conglomerate Combination - is one invoving companies in unrelated industries having litte it ny. production or market similatities for the DuIpose of ente ing info new markets or industries = such as a fre manufacturer and an insurance company. 4. Circular Combination - entails some diversification. but does not have @ drastic change in operation as a conglomerate, For exampie — San rigue: Corporation accomplished when mey diversty their actiwtes by putting up Macmehs “roauets ‘Method of Combination (Legal Point of View) Business Combinations are also classified by method ct combination into three types - statutory mergers. statutory consolidations. and stock ax quisition, A Statutory Merger results when one company acawies ail the ne? asses (assets and fabiites) of ‘one or more other companies through an exchange of slock, payment of cash oF other properly, oF the sve of debt instruments (or @ comisinaticn cl these methods). ie aequiing Company survives [remains in existence). whereas the acqured Company {or Companies) ceases to exst as a separate legal entity, olthough if may be continues as a separ sis a¥,19n of the acquiing company. AFAR-08Advanced Financial Accounting & Reporting Page 2 Thus, if A Company acquires 8 Company in G stu’ ley merger. the combination is offen expressed as ‘A Company + 8 Company = A Company Or. 8 Company acquires A Company: ACompany * 8 Company = 8 Company The Board of Directors of the companies involved, normally negotiate the terms of a plan of merger. which must be opproved by the stockhoiaers of each company involved. A Statutory Consolidation results when o new corporation is formed to acquire the net assets (assets and liabilities) two ot more other corporations. The acquired company. then cease 10 exist as separate legal entities. For example. if C Con nany is formed to consolidate A Company and 8 Company, then the combination is generally oxc28ed as follows: A Company + 8 Company = C Company Stockholders of the acquired companies {A and 8) become stockholders in the new entity (C). The acquired companies may be operated as separate divisions of the new corporation, just as they may under a statutory merger. Statutory consolidation requites the same type of stockholders approval as in statutory mergers. The use of the term consolidation shoul not be confused with the accounting usage of the same word. in accounting. consolidation refs %0 the mechanical process of bringing together the financial records of two or mote cigarieations tv form a single set of statements. Statutory consolidation is a legal term used to denote o specific type of business combination in which two or more existing companies are united unae she ownership ol a newly created company. A Stock Acquisition occurs when one corporation pays cash or issues stock or debt for all part of the voting stock of another company, and the acquired companies remained intact as a separate legal entity. it the acquiring company acquires more than 50% of the voting stock of the acquired company, for example, if A Company acquites 75% of the voting stock of 8 Company, a parent- subsidiary relationship results. Consolidated financiai statements (explained in later topics) are prepared and the business combination is ollen expressed as: Financial Statements of A Co. + Hnancial Statements of Co, Consolidated Financia Statements of A Co. and B Co. The stock may be acquired trough marke! purchases or through direct purchase from, or exchange with, individual stockholders of the subsidiar, company. Sometimes stock is acquired through a fender offer. which is an open offer 10 purchase up to a stated number of shares of a given corporation at a stipulated price per share. The offering price is generally set somewhat above the Current market price of the shares in order to provide an additional incentive to prospective sellers. The investee or subsidiary company continues its eqal existence and the investor or parent company records its acquistion in its records as a long-term investment Although business combination is a broad term encompassing all forms of combination and the terms ‘merger and consolidation and stock acquisition nove technical, legal definitions, the three terms are offen used interchangeably in practice. thus. one cannot aiways tely on the accuracy of the term used to identify the type of combination, but, must look to the facts of the situation to determine its ‘accounting treatment Method of Accounting for Business Combinations $s combinations. The pooling of interests method is The acquisition method is used for ail busi prohibited. Acquirer must be identified. Under PFRS No.3 ‘combinations. Identincation of an Acquirer Control. The acquirer is the combining entity that obiains control of the other combining entities or businesses. PFRS No. 3 provides considerable guidance tor identitying the acquirer. acquirer must be identified for all business Other indicators of which party was the acquirer in any given business combinations are as follows (these are suggestive only, not conclusive} 1 The fair value of one entity s sionticantly greater than that of the other combining enterpnses; in such a case, the larger enhity woul! be deemed the acquirer. AFAR-08Advanced Financial Accounting & Reporting Page 3 2. The combination 1s effected by an exchange of voting stock for cash: the entity paying the Cash would be deemed to be the acqurer. 3. Management of one enterprise is able to dominate selection of management of the combined entity: the dominant entity would be deemed to be the acqurer Recognizing and Measuring Goodwill and Gain from a Bargain Purchase As a result of the PFRS 3 Revised. the way in which goodwill or a gain on @ bargain purchase is calculated has changed, being the difference between: |. The sum of ¢ the fair value of the consideration transfered the recognized amount of any non-controling interest in the acquire # fora business combination achieved in stages. the fair value of any previously held equity interest in the acquire: and Il The acquisition-date recognized fair value amount of the identifiable assets acquired and Nabiities assumed. Goodwill arises when | exceed Il, under: » Option 1: “Full” Goodwil Method ~ there is @ non-controliing interest share in the goodwill > Option 2: “Partial” Goodwill Method - there is me non-controlling interest share in the goodwill Bargain purchase arises when Il exceeds J. When a bargain purchase (as previously defined) Occurs. @ gain on acquisition is recognized in the profit or loss. While this is consistent with the pronouncement of PERS 3 (old) under Option 2. the amount recognized may differ. due to the other changes in the PFRS 3 Revised (new) which may also allow Option 1. Its under Option (1) where there is an inconsistency of recognition of gain. wherein any excess that remains is recognized as a gain, which is attributable only fo the acquirer (or parent company). Belore concluding that bargain purchase (or discount on acquisition) hos arisen, however PFRS No. 3 requires that the acquirer shall: 1. reassess the identification and measurement of the acquirce’s identifiable assets, fiabiliies. and contingent liabilities and the measurement of the cost of the combination: and 2. recognize immediately in profit or ioss any excess remaining after that reassessment. Consideration transferred For the purposes of appiying the acquisition method, the fair value of the consideration transferred in exchange for the acquire''s interest in the acquitee is calculated as the sum of: ©. the acauisition-date fair values of the assets transferred by the acquirer, lcbilities assumed or incumed-by the acquirer, and equity interests issued by the acquirer. Examples include cash, other assels, contingent consideration, a business or a subsidiary of the acqurer, common oF preferred equity instruments, options, warrants, and member interests of mutual entities: and b. the acquisition-date foir valve of any non-controling equity investment in the acquire that the acquirer owned immediately before the acquisition date. The consideration transfered may include assets oF liabilities of the acquirer that have carrying ‘amounts that differ trom their fair values at the acquisition date (for example, non-monetary assets or (© business of the acquirer). In that case. the acquirer shall remeasure those transferred assets or liabillies to their fair values as of the acquisition date and recognize any gains or losses in profit or loss. However, if those assets or liabilities are transfered to the acquiree and, therefore, remain within the combined entity after the business combination, the acquirer shall eliminate any gains oF losses on those transferred assets or liabilities in the consolidated financial statements The ecquisition-date fair valve of the consideration transferred, including the fair valve of each major ‘class of consideration. such as: 1. Cash or other monetary assets. The fair vaive is the amount of cash or cash equivalent dispersed, Ihe amount is usvally readily available. 2. For deferred payment, the fair value fo the acquirer is the amount the entily would have tc borrow 1o settle ther debt immediately. Hence. the discount rate used i the entity's incremental borrowing rate. AFAR-08Advanced Financial Accounting & Reporting Page 4 3. Non-monetary assets. These consist =f cssels such as property. plant and equpment investments. licenses and patents. if active second-hand market price exists. falr values con be obtained by reference to ihose markets. Where active markets do not exist. other means of valuation. including the use of expert vauers, may be used 4. Equity Instruments. if an ocquirer sues is own shares as consideration. it will need to determine the fair value of those shares of tne date of exchange 5 Debt instruments/tiabilities undertaken. It fair volves of liabilities undertaken are best measured by the present value of fulum cash outtiows, As noted in PERS 3, future losses or other costs expected fo be inci "ed as es." of the business combination ore not llobilies fof the acquter and eve therslore not included in the colcuiation of the fair valve of Consideration paid These must be treated. post-combination expenses 4 Contingent consideration. The acquter shall recognize the aequisition-date fair valve of Contingent consideration PFRS 3 Revised has formally defined contingent consideration as Additional consieration by the acquirer 1o the former owners (or return of consideration from the former owners). Changes that are the result of the acquirer obtaining additional information about facts and cicunistances that existed al the acquisition date. and that occur within the measurement period (which may be a maximum of one year from the acquisition date) cre recognized cs oriistments against the orginal accounting for Ine acquisition (and so may ir pact goodwil, Changes resulting trom events after the acausinon date are not measurement perioa adjustments. Such changes aie therefore accounted for separately trom the business combination Costs and Expenses of Business Combination The PFRS 3 Revised states that acquisition related costs are costs incurred by the acquirer to etfecta business Combination, including reimburietnen's to the acquiee for beanng some of the acquisition costs. except costs of issuing debt instuments are accounted for under PAS 39, and costs of issuing ‘equity instruments are accounted for under PAS 32. .nall be accounted for a5 expenses in ihe periods in whi incurted. they are summarizes a Hollows mr Examples + Usatment ‘Grect acquisition co: US Coss of suing secuntes (sue To AbiC nae | and register stocks)" -Simitriy, the cost of arranging (registering) and issving debt securities or financial liabilities are an integral part of the lability issue transaction (Bond Issue Costs). ‘Allocating the cost of the business combination Por. 36 0f PFRS 3 inchides ihe following s"a'emen “ihe acqurer shall measure <2n7 recognize as of the acquisition date the assets acquited ond fabilties assumed as port of the business combinahon. The identable Gsse's acquired ond kabiities assurnec #3 be measured at far value and recognized separately rom goodwil. Recognition of Acquired Assets and Liabilities the allocation of acquired assets and liabilities measurerent which is at fair value occurs at ‘acquisition date. The allocation requees the recognition of 1. Kdeniifioble Tongible Assets. An sss) omer nan an intangible asset is recognzed it is Probable [probobiity test) that ry as.onCled tutute economic Denelits wi low 10 the ‘acquirer, and its fo value can be meased reliably (revarty tes!) AFAR-08Advanced Financial Accounting & Reporting Page S 2, IdentMable titangible Assets. PFRS 3 Revised requires the acquirer to recognize identifiable assets acquited regardless of ihe degree of probability of an inflow of economic benefits This ‘change emphasizes the expectation that all intangible assets that satisfy the definition criteria in PAS 38. if acquired as part of a business combination, must be recognized. An intangible asset is identifiable iit > con be separated: or > meets the contractual-legal criterion e.g. license to operate a nuclear power plant is an intangible asset. even though the acquiter cannot sell or transfer the license separately from the acquired power plant. the acquirer sholl recognize. separately from goodwill. the acquisiion-date fair value of intangible assets acquired in a business Combination that meet the definition of an intangible asset in PAS 38, Examples that would meet the definition of intangible Assets: @. Marketing-elated intangible assets: + trademarks, trade names, service marks, collective marks and certification marks interme! domain names + fade dress - unique color. share or package design - newspaper mastheads - _non-compelition assets b. Customer-telated intangible assets: + customer ists ‘order oF production backlog + customer contracts and the related customer relationships + non-contractual customer relationships ¢. Atistic-teloted intangible assets: + plays, operas and ballets = Books, magazines, newspapers ond other literary works musical works such as compositions. song lyrics, and advertising jingles + pictures and photographs = video and audiovisual material. including films. music videos. and television programs @. Contract-based intangible assets = licensing, royally. and standstil agreements = advertising, construction. management, service or supply contracts = lease agreements = construction permits = franchise agreements + operating and broadcasting rights = _ use rights such as driling, water, timber-getting and route authorities = _ servicing contracts such as mortgage servicing contracts ‘employment contracts priced below their market value e. Technology: based intangible contracts patented technology = computer software and mask works + unpatented technology + databases = trade secrets such os sectet formulas, processes or recipes 3. Uobilties. A liability other thon a contingent lability is recognized if itis probable that on outiow of resources wil be required fo settle the obligation, and is fair value can be measured reliably. 4. Contingent Liabilities. PFRS No. 3 Revised requires recognition of a contingent liability (of the acquiree) ossumed in a business combination will be recognize al their fait valves if itis @ present obligation that arises from past events and its fair value can be measured reliably. regardless of the probability of a cash tlow arising, AFAR-08Advanced Financial Accounting & Reporting Page 6 Tree Comporation is a company involved in inanulactuting cars. On January 1, 2019, the board of directors of the said company has decided to ucquire the net a:sets of Knee Corporation and Dudd Corporation, suppliers of matenals they use in production. he merger s expected to result in prodk cars with lower total cost. higher quality The following information was gathered from the books of Ine entities on January 1. 2019: [Curent Assets _ | P1375,000 59500 Hicbiities Ordinary Share Copital, F100 par [Share Premium = Ordinary share Accumuiated Profits (Lo Tree wil issue 22.500 of ils ordinary shares in exchange for the net assets of Knee and 11,200 of its ordinary shares in exchange tor the net assels 0: Duc. The fair value of Tree's shares is P150. In addition, the ne fait valves were available: The following out of pocket costs of the combination weie as follows legal fees for the contract of business cont ination Audit fee for SEC registration of share #36 Printing costs of share certilicaies Broker's fee. Accountant's fee for pre-acauistion audit Other direct cost of acquisition Intemal secretarial general and allocated expenses Documentary stamp tox on the new shares Required: P 230,000 [1-975.000_ _|_ Dud P 8.000 9.000 5,000 4.000 10,000 7,000 97,000 2,000 1. Record the acquisition of the net ussets of Kriee end Dudd and related transactions on the books of ree 2 Determine the following amounts ‘hat will aj,pecr in the balance sheet of Tree an January 1. 2019: a. Goodwill arising from acquisition of Knee . Gain on acquision of Duds {le Le added to accumuioted P&L) c.Cumtent assets 4d. Noncurrent assets e. Total assets {. Total iabilties 9. Ordinary share capital h. Share premium i. Accumulated profits (losses}/retained ecsning: j. Shareholders'equity. 3, (Cosh Contingency) Determine the amourt cl goodwill arising trom business combination of ‘assuming that Tree agreed to pay an additions! P500 000 on January 1, 2021 to Knee Company. if the average income of Knee Company dung the 2-year period of 2019 - 2020 exceeds 5,000,000 per year. The expected valve 1s P200,000 calculated based on the 40% probability of achieving the target average income. The amount of goodwill ansing from acquisition amounted to: 4. Assuming the some facts 0$ in {3} above. Befors the contingency petiod is over, the probability present valve of the eomings contingincy decines to P180.000 determine the amount o! goodwill if the changes in’ ‘2. the valve is within the measurement period {due to facts and circumstances existing at of the date of acquisition). bb. the valve is due fo events occurring subsequent fo acquisition. AFAR-08Advanced Financial Accounting & Reporting Page 7 (Stock Contingency with Market Value Given}. In addition to the stock issue, Tree Company also agreed to issue additional shares of common stock to the former stockholders of Knee Company the average post-combination earnings over the next two years equaled or exceeded 5.000.000 per year. The additional 2,000 shares expected to be issued are valued at P320.000 On January 1, 2021. the earings tor 2019 and 2020 amounted to P5,000,000 and PS.350.000. respectively, Required: ‘a Determine the amount of goodwill on January 1. 2021 b. The entry on January 1, 2021 4. (Stock Contingency] In addition to the stack issue Tree Company also agreed to issue additional 2,000 shares of common stock lo the former stockholders of Knee Company two yeors later it the faut value of acquirer {Tree's common stock) fell below P150 per share. On January 1. 2021, the contingent event happens and the common stock of Tree had @ fair value below P150. Required: a. Determine the amount of goodwill on January |, 2019 'b._Ihe entry on January 1. 20: The entry on January | 2021. if the fair value of stock increase to P15: 7 (Stock Contingency). In adcilion to the stock issue. Tree Company also agreed to issue additional shares of common stock to the former stockholders of Knee Company on January 1. 2021. to compensote for any fallin the market value of Tree common stock below P150 per share. The settlement would be to cure the deficiency by issuing added shares based on theit fair value on Janyary 1, 2021 (On Janvary 1. 2021, the contingent event happens and the stock had a fait value of P135. b. The entry on Janvary | 2021 Determine the amount of goodwill on January 1, 2019 I1- Consideration Transferred: Using Bonds with Gain on Acquisition (On January 1, 2014, Perez Company acauited all the assets and assumed all the liabilities of Stalton Company and merged Stalton into Perez in exchange for the net dssets of Stalton, Perez gave its bonds payable with maturity vaive of P400,000. a stated rate of 10%. interest payable semiannually ‘on June 30 and December 31, ¢ maturity of January 1.2024, and yield rate of 12%. Balance sheets for Perez and Stalton (as well as fair value data) on January |, 2014, were as follows i |. Perez Boot vaive 1 Cash 250,000 | | Receivables 352,700 | | Inventories | 848,300 | Land | 700,000 | ! Buicings | 950.000 ' | Accumulated depreciation. buildin (325.000) | Equipment... 262.750 | | Accumulated depreciation: equipment | 200501 | | Totat assets | P2.968.700 | | Current habilties | P-292.700 | | Bond payable, 8% due 1/1/2019, Interest payable i | 6/30 and 12/31 ! | Common stock. P15 par value 1 200.000 | Common stock, PS pat value Other coninbuted capital 950,000 Retained camings |. 526,000 otal equities, : i £.2.968.700 | The amount of goodwill or gain on acquisition: «oP 81,872. gain c.P 16,950 goodwill tb P268,952 gan d. P 56,950 goodwill “Siation ] Book Valve Fait Value | 114,000 P 114.000 150.000 135,000 232,000 310,000 100,000 315,000 410,000 54,900 (170,500) 136,450 39.450 120,450) 5 PBB1.S00 °.968.350 95300 95,300 300000 760.000 236,500 170,000 72,100 881.500 AFAR-08a) )) Advanced Financial Accounting & Reporting Page 8 m Pam Company &s acquiting the net assets of Jam Company for an agreed-upon price of P?00,000 on wy } 204 The valve was tentatively assig vec as follows Curent assets P 100.000 Lona 50,000 Eavioment : 200.000 (5-year lite) ButaNg 500,000 (20-year life} Conent hatoilites, sx { 150,000) Gooawit 200,000 Valves were subject to change dunng the measurement period. Depreciation is taken to the nearest » the measurement period expired on July 1. 20x5. at which time the foir values of the lion data wos revised 10 P180,000 and P550,000. nents ate needed for the financial statements for the equipment and building as of the acqu respectively. At the end of 20x3, what adjus fending December 3} 20.4 andl 205? Answers: The 20x4 financial statements would be revised as they are included in the 20x4 - 20x5 comparative statements The 20x4 statements would be based on the new valves. The adjustments would be: (2) The equipment and building will be resiated at P 180,000 and P550,000 on the comparative 20x4 ‘and 20x5 balance sheets (b}Ofiginaly, depreciation on the equioment wos P40,000 {P200.000/5) per year. It will be recalculated as P36,000 (P180.000/5} per year. The adjustment for 20x4 is for a hall year 20x4 depreciation expense and accumlat2c viepreciation will be restated at P18,000 instead of 20,000 tor the hall year. Depreciation expense for 20x5 will be P36.000. [c) Onginaty. depreciation on ihe duilaing was P2500 [PS00.000/20) per year It wil De recalculated as P27,500 (P550.400/20) per yeor. the adjustment for 20x4 is for a half year 20x4 depreciation expense and accumvioted depreciation will be restated at F13,750 instead of P12 500 for the halt year. Depreciation expense for 20x5 wil be P27 500. (3) Goodwill is reduced P30,000 on the comparative 20x4 and 20x5 balance sheets. wv Gen acquied the net assets of Mctk Corp. on July | 20x5. In exchange for net assets at fair market valve of Mark Co. amounting to 835.740, Geri zsued 81,600 shares af G market price of P12 per share (P9 par valve) Out of pocket costs of the combination were ar ‘oliows Legal fees for the contract of business combination 10,000 Audit fee for SEC registration of share issue 13,000 Costs of shares of stock certificates 7,000 Broker's fee 8,000 Other direct cost of acquisition 22000) General and allocated expenses 25,000 Gen will pay an additional cash Consideration uf P546.000 in the event that Mark's net income will be equal or greater than P1.140,000 for ihe period ended December 31, 20x5. At acquisition. there is a high probability of reaching the forge! nel income cnc! the fair value of the additional consideration was determined to be P234,000. ACtual net income for the peniod ended December 31, 20x5 amounted to P1,500.000. The additional consideration was paid 1. What is the amount of goodwill 1o be recognized in the statement of financial position as of December 31, 20%5? a PO. bb -P257.040 £377,460 P45 640 fexpense} to be recognized for the year ended 2. What amount chargeable to operations (loss) December 31. 20x5? ao PO s. b. 337,000 d AFAR-08Advanced Financial Accounting & Reporting Solution Guide - page 1 1 The computations of goodwil/bargaln purchave gol or os folows: Knee Company:Dudd Company: | Comiderefion tontened a apiol Foor ‘ACCUMUIaIEG Proll losses) | Acquisilor-eloted expenses 29.0 | mal Casn Acquistion elated costs - dec! costs | Aecumolacs os ones /Acquitonseatc expenses 9,000 | Cast | Acquittion eloted costs - indirect cosn. ‘hare premium | 6.000 Cosh | Acquistion elated costs ~ cost fo sive and regiter stocks. eas ME tv — Curent assels | P 1.375,000- 54,000 : | Noncurrent assets | 3125.00 “75s Sas Gooawi + 985,000 Totalassets | | 325.000 + 210.000 * | 140.000 tr Ordinary Snore =| 2.748100 (22.500sh x P00) (11.2005, xPI00) | Snare premium — | 176.500 (22.5005 x P50) (1200s x Ps) | | 14000 cos toiswve and register) roc. 9a0ic | + 385.000 gan | | Lobes | Acc. profisfosses “TotabEquites | 3 Goodwill - P1,185,000 Tass MV ot AB Lol Knee. ‘Cuten! ones ‘Non current owes ‘he Jounal erty on Joneay 1.3 Curent ose oncunent awete 00% ‘wooatea | Ora snare capital F106, Shore prema ~Esimotoa tba Ie crgent SoRaGESTSA 44. Gosdwl-P1165,000 (thin meosurement period) ‘mated toby fr contingent corsderaton T 1 ‘Goodwit | _wininne measurement pened . Goodwil=PT,185,000 (subsequend change) Fated labily for contingent consceranon ‘Gain dve to subsocuent events | ue 19 events subsequent fo accuisihon (which means not | ‘exiting on the date of acqutition) snout be charged 7s | ofed Thal here could Be several adjustments (CRSCOTOr'| fist year or later mus! be recognued in CuMtent PAL. and not os purchase price axkustment AFAR-08a ‘during the fist year post ‘2cquistion, BUT ALL ot those would be bated on information that exhfed of the date of acquistion. (bu! could only becoming reveaied in a plece-meal or installment fashion whe ner is matenal or mmatenl hos No retevonce. ot dl). BUT. anything resulting from actual events or changes in cucumstances AFTER the acquistion. whethes win teAAavonced foncial Accounting & Repering 50, Goodwil= 71,308,000 Consideration ranstered. Shotes. 22.500 snes «P18 Add Stock contngyncy Comenaton norsoneed piactea ntistire non cent ete i * sy on Sade L 1 bb, January 1, 2019: Note: contingent consideration ax equity 8 not remeasured.and any setement is accounted or winin ne equ _— ‘Shove Promum PC Tor alock contingen “ | Orctrary Share Capita. P2000" » | | Share Premum/PiC in excess of { } ved jw fiagen eri naps 1 Taine Pripoe Inloretatons Commitee (PC\ -on-ased Hot Ie wice! 2 be bed 10 “Share hawance Cous" wit be Heated oF 2 Conra shareholder equly account ic devon > "ho few. ne oreo peony: Te pore Prem rom prewovs shee orc «7 2 _Retoned Fomingr(sccvendtes Pt coh} oh OBE wate acai wong perendl ole, the word ef” inclcated 08 tne FIC QA a3 publihed should be removed since Mis qute mieoding ‘Decovte he sotemant “ode! of pany" was reozy in vied. 7 She prem | Be Snore constr F100 er «7 C00 sae hot knowing when te down wiicome. 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