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Does the price asked seem to be a real bargain?
Consider the fair value of the entire equity of Al’s Hardware; then decided if the price is reasonable a 60% interest.
If the deal were completed, what accounting methods would you recommend either on the books of Al’s Hardware or in the consolidation process? Al’s Hardware would remain a separate legal entity with a substantial noncontroling interest.
What if Great Value Hardware Stores was less concerned about being associated with statements that were not accurate and felt strongly about closing the deal for non-financial reasons?
How would you proceed?