case $12-2$c

to recognize or not to recognize, that ist he question

Acquisition of a New Publishing Company Using the funds from the modified line of credit, Shakespeare$$s management drew $$10$ million from the additional capacity on March $10,20$X$4,$ to acquire Hamlet, a competitor$$ publishing company in the northeast United States. On the basis of its initial assessment$$ from the Company$$s due diligence $($that started shortly before the balance sheet date$),$ management$$s best estimate of the allocation of the $$10$ million purchase is as follows: $$2$ million of current assets and $$8$ million of noncurrent assets $($comprising $$5$ million of$$ identifiable noncurrent assets, $$2$ million of intangible assets, and $$1$ million of$$ goodwill$).$ Hamlet$$s prior$-$year audited financial statements included revenue of $$3\mathrm{.}2$ million and EBITDA of $$1\mathrm{.}1$ million. The estimated purchase price allocation has not$$ been finalized and is expected to be after the financial statements are issued. How, if at all, is the acquisition of Hamlet recognized or disclosed in the financial statements?