A controlling financial interest is defined as an investment of 50% or
more of the voting equity of another entity. According to ARB 51, a
company that holds 50% or more of the voting equity of an affiliate is
viewed as the controlling parent company and should include the
affiliate in its consolidated financial statement (Jones 08/2018).
Pushdown accounting is a method of accounting for the purchase of
another company at the purchase price rather than its historical cost.
The target company's assets and liabilities are written up or down to
reflect the purchase price. An acquiree can elect to use pushdown
accounting in its separate financial statements upon the occurrence
of an event in which the acquirer obtains control of the acquired
entity (Dietrich 12/2016)
Before applying pushdown accounting having all the facts and
circumstances into consideration is a most, you should include any
and all potential tax effects. The acquiree shall make the election to
apply pushdown accounting before the financial statements are
available to be issued (nonpublic entities) for the reporting period in
which the change of control event occurred. If elected, pushdown
accounting must be applied as of the acquisition date. The decision
to apply pushdown accounting to a specific change in control event is
irrevocable (Dietrich 12/2016).
Norbert F. Dietrich & McClintock & Associates Dec,2016
PUSHDOWN ACCOUNTING
Pushdown Accounting - McClintock & Associates
(mcclintockcpa.com)
Richard C. Jones, PhD, CPA August 2018, Common Control Entities
and Consolidation of Variable Interest Entities: CPAJournal.com
Common Control Entities and Consolidation of Variable Interest
Entities - The CPA Journal
