PCLN » Topics » Application of Pushdown Basis of Accounting in Financial Statements of Subsidiaries Acquired by Purchase

This excerpt taken from the PCLN 8-K filed Sep 29, 2005.
Application of “Pushdown” Basis of Accounting in Financial Statements of Subsidiaries Acquired by Purchase,” Bookings B.V. is required to apply pushdown accounting as a result of the acquisition.

 

The purchase price of the acquisition was approximately EUR 10.1 million, paid by cash of EUR 8.1 million and stock. Based on an independent valuation, the Company allocated EUR 0.4 million to net assets, EUR 4.3 million as Goodwill and EUR 7.8 million as identified intangibles, including supply and distribution relationships, customer lists, tradenames and internal use software. The acquired intangible assets are being amortized on a straight-line basis over a period of three months to thirteen years. The deferred tax regarding the identified intangibles amounts to EUR 2.4 million.

 

This adjustment recognizes the impact under US GAAP of applying push down accounting at the balance sheet date as well as the effect on net profit (loss) of the incremental amortization of the intangibles therein compared to the amortization as historically recorded for the respective periods.

 

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