Essay About Common Stock And Shareholders’ Equity Value

Accounting for Mergers and Acquisitions
[pic 1]“Accounting for Mergers and Acquisitions”IAS 22 | Business CombinationsIAS 38 | Brands recognitionInternational Financial Reporting StandardsProfessor Cristina Neto de CarvalhoOutubro 2016The initial SE accounting value and the way intangible assets were then recognizedThe Shareholders’ Equity value is basically the difference between the firms’ assets and liabilities. It is also called Book Value of equity and it represents an accounting measure of the net worth of the firm. The Shareholders’ equity has to be taken carefully since it doesn’t represent the true value of a firm. First, many of the assets listed on the balance sheet are valued based on their historical cost rather than the true value today. Secondly, assets such as expertise of the firms’ employees, firm’s reputation and quality of management team are not captured in the balance sheet. Stockholders’ Equity20042003Common stock,par value $1 per share           –                –     Authorized: 2,320 shares,Issued 2004– 1,382 shares    1.382       1.374   Additional paid in capital    1.521       1.273   Earnings Reinvested in the business    8.736       7.333   Accumulated other comprehensive loss-      760   –  1.088   Treasury stock,at cost:2004–392 shares,2003-367 shares- 7.683   –  6.665   Deferred stock-based compensation           –     –           3   Total Stockholders’ Equity    3.196       2.224   As you can see Gillette Company follows the US GAAP. At the Gillette statement of financial position you can identify all the requires component of the US GAAP such as Common Stock, Authorized shares, Issued shares, Additional paid-in capital, Earnings reinvested Accumulated other comprehensive loss, Treasury stock, Deferred stock-based compensation and Total stockholders’ equity. The most relevant difference between IFRS and US GAAP is the minority interests which are included at the shareholders’ Equity of an European company whereas separated from the Shareholders’ equity in a US company.