Page 39 - FINAL CFA I SLIDES JUNE 2019 DAY 7
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Session Unit 7:
25. Understanding Balance Sheets
LOS 25.e: Describe different types of assets and liabilities and the measurement bases of each,. p82
Current Liabilities, p84 Non-Current Assets, p85
• Accounts payable • Property, Plant and Equipment
• Notes payable and current • Investment property
portion of long-term debt • Intangible assets
• Accrued liabilities • Goodwill (excess of purchase price over fair value).
• Unearned revenue
tanties
Example: Goodwill, p. 86/ Wood Corporation paid $600 million for the outstanding stock of Pine
Corporation. At the acquisition date, Pine reported the following condensed balance sheet.
The fair value of the plant and equipment was $120 million more
than its recorded book value. The fair values of all other
identifiable assets and liabilities were equal to their recorded
book values. Calculate the amount of goodwill Wood should
report on its consolidated balance sheet
