pooling of interests

Pooling of interests

An accounting method for reporting acquisitions accomplished through the use of equity. The combined assets of the merged entity are consolidated using book value, as opposed to the purchase method, which uses market value. The merging entities' financial results are combined as though the two entities have always been a single entity.

Pooling of Interests

A way to record a merger or acquisition where the assets and liabilities are added together and netted. The pooling of interests method does not create good will and therefore results in higher earnings for newly merged or acquired entity. The pooling of interest method contrasts with the purchase acquisition method.

pooling of interests

An accounting method for combining unchanged the assets, liabilities, and owners' equity of two firms after a merger or combination. Before being discontinued in 2001, pooling was a preferred method of accounting for mergers because it generally produced the highest earnings calculations for the surviving company. Compare purchase method.
References in periodicals archive ?
Historically, two methods have been used to reflect these transactions -- the purchase method and the pooling of interests method -- although under conditions that vary greatly from country to country.
19, 1976), the Financial Accounting Standards Board has issued Statements 141 and 142, doing away with pooling of interests.
The purchase method (popular worldwide) and pooling of interests method are the two methods used for recording business combinations.
96, Treasury Stock Acquisitions Following Consummation of a Business Combination Accounted for as a Pooling of Interests.
Inc, making the most of what could be the final months of the pooling of interests accounting method, has snapped up another company; this time buying Online Anywhere for $80m in Yahoo stock.
48 in 1957 accelerated the pooling of interests method by providing greater endorsement than ever before.
On the business combinations/ pooling of interests issue, Lucas reiterated that the FASB began re-deliberations last March and is continuing to explore related goodwill issues, as well as a non-amortization approach that would include an asset impairment test.
FASB unanimously voted that day to eliminate pooling of interests as an acceptable method of accounting for business combinations.
The comment period on the FASB proposal to eliminate pooling of interests in favor of purchase accounting for all business combinations just closed.