On August 27, 2015, Celgene Corporation acquired all of theoutstanding stock of Receptos, Inc., in exchange for $7.6 billionin cash. Referring to Celgene’s 2015 financial statements and itsJuly 14, 2015, press release announcing the acquisition, answer thefollowing questions regarding the Receptos acquisition.
Why did Celgeneacquire Receptos?
What accounting methodwas used, and for what amount, to record the acquisition?
What amount didCelgene include in pre-combination service compensation in thetotal consideration transferred? What support is provided for thistreatment in the Accounting Standards Codification (see ASC805-30-30, paragraphs 9-13)?
What allocations didCelgene make to the assets acquired and liabilities assumed in theacquisition? Provide a calculation showing how Celgene determinedthe amount allocated to goodwill.
Describe the nature ofthe in-process research and development product rights acquired byCelgene in its acquisition of Receptos.
How will Celgeneaccount for the in-process research and development product rightsacquired in the Receptos combination?
