Accounting for mergers and reverse mergers: An instructional assignment using SEC Form 10-K and S-4 disclosures

Michael Schoderbek

Journal of Accounting Education, 2011, vol. 29, issue 2, 122-141

Abstract: This instructional assignment explores two real-world business combinations, focusing on contextual factors surrounding the merger as well as accounting recognition by the legal acquirer. The business combinations studied in this assignment are Exxon Mobil Corporation’s (2010) acquisition of XTO Energy Inc. and the 2010 reverse merger between RRI Energy, Inc. and Mirant Corporation. Students must utilize disclosures in Forms 10-K and S-4 to: (1) investigate the reasons behind the merger, (2) examine the criteria used for determination of the “accounting acquirer” (in the case of RRI Energy and Mirant), and finally (3) prepare the entries to combine the firms at the time of merger. Students must learn the basics of reverse-acquisition accounting from relevant authoritative pronouncements as well as study the legal environment surrounding business combinations. Targeted for Advanced Accounting courses, this instructional assignment meets calls from the accounting profession and the Accounting Education Exchange Commission (1990) for instructors to integrate real-world problems that capture complex business transactions into the course curriculum.

Keywords: Acquiring company; Advanced accounting; Instructional assignment; Reverse merger (search for similar items in EconPapers)
Date: 2011
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0748575112000048
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:joaced:v:29:y:2011:i:2:p:122-141

DOI: 10.1016/j.jaccedu.2012.02.003

Access Statistics for this article

Journal of Accounting Education is currently edited by Natalie Tatiana Churyk

More articles in Journal of Accounting Education from Elsevier
Bibliographic data for series maintained by Catherine Liu ().