Expander Plc Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Analysis:
The acquisition deal was analyzed to look at the goodwill or consideration provided by the acquirer to the Target in the form of either cash or in consideration by providing shares or options to cash in afuture date.
Effect of nature of consideration on the calculation of goodwill:
The nature of consideration affects the calculation of goodwill in such a way that when the company tries to evaluate the assets and liabilities acquired at the fair values as at the acquisition date. This makes it easier for the company to measure the non-controlling interest such as in the case of Expander PLC it is 30%, which is not owned by the company. This makes it difficult for the company to identify the most appropriate option for calculating the consideration value either under the fair value method or under identifiable net assets value method.
The nature of consideration also affects the decisions of shareholders when the acquirer company acquires the Target Company. The shareholders or Stakeholders are affected by this decision. The other stakeholders, which are affected by the decision,includeLenders or creditors, customers, auditors, suppliers, target shareholders and the competitors as well, if the companies are involved in the acquisition process.
Moreover, the parent company may provide different stock options to the existing shareholders of the subsidiary company to attract their investments and secure their interests in the company and generate more equity funding. This will lead to the better value creation in the form of higher interest and support from the shareholders.

Expander Plc Harvard Case Solution & Analysis
The companycannot recognize those assets and liabilities, which are not falling under the definition of IFRS, as assets or liabilities, and they should meet the certain requirements as mentioned in the standards to qualify for recognition such as the non-recognition of intangibles by Target Companycannot be recognized(IFRS 3, 2017).
The company has an opportunity to provide the consideration in different forms, whichare allowed by IFRS. The consideration given by the Acquirer may be in the form of cash or money, share options, shares, now or future contracts, contingent assets based on the conditions, which may be beneficial for both the companies. Moreover, it may also include the physical assets such as land, building and inventory, which may be considered as consideration. Moreover, the acquirer may provide consideration in the form of Employee Share options of the target company at discounted prices or may offer more shares to attract them. This may also include the assumption of the liabilities of Target Company at the fair value and the same will be considered while calculating the goodwill at the time of acquisition.
Furthermore, company may face the problem at the time of recognition of assets and liabilities because there is an exception in the rule that company cannot recognize contingent liabilities as assumed liability, income taxes, indemnification assets, employee benefits, share-based payment awards, reacquired rights and assets held for sale while calculating the fair value of the Target Company. Moreover, IFRS has provided two methods, whichhave been mentioned above.

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