1. When contingent consideration in an acquisition is based on the acquirer issuing its shares to the seller, how should this contingency be reflected on the acquisition date?

LO 52. What are pro forma financial statements? What is their purpose?

LO 33. How would a company determine whether goodwill has been impaired?

LO 34. AOL announced that because of an accounting change (FASB Statements Nos. 141R [ASC 805] and 142 [ASC 350]), earnings would be increasing over the next 25 years by $5.9 billion a year. What change(s) required by FASB (in SFAS Nos. 141R and 142) resulted in an increase in AOL's income? Would you expect this increase in earnings to have a positive impact on AOL's stock price? Why or why not?

Business Ethics