1. CH. 5 ANALYZING INVESTING ACTIVITIES: SPECIAL TOPICS

2. Intercompany Activities Intercorporate investements –Recognition of investee company earnings –Unrecognized capital investment

3. Intercompany Activities Business Combination –Valuing the consideration –Contingent consideration –Allocating total cost –Debt in consolidated financial statements –Gain on subsidiary IPOs –Preacquisition sales and income –Push-down accounting –Additional limitations of consolidated financial statements

4. Intercompany Activities Pooling Accounting –Assets are carried at book value => goodwill is not reported –Understatement of assets Understatement of expenses => overstatement of income Overstatement of gains on assets disposition

5. International Accounting Obstacles due to differences in accounting practices peculiar to a country where operations exist Obstacles arising from translation of assets, liabilities, and equities into the home-country measuring unit.