Purchase accounting

Purchase accounting

Method of accounting for a merger that treats the acquirer as having purchased the assets and assumed the liabilities of the acquiree, which are then written up or down to their respective fair market values. The difference between the purchase price and the net assets acquired is attributed to goodwill.

Purchase Accounting

In mergers and acquisitions, a method of accounting that treats the acquiring company as if it bought the assets and assumed the liabilities of the target company; all the assets and liabilities are placed on the acquiring company's balance sheet according to their current market value. Because the purchase price of the target company often exceeds this, pooling-of-assets accounting is more common. See also: Goodwill.
References in periodicals archive ?
The company's guidance includes the recognition of acquired revenue which is excluded under GAAP's purchase accounting rules, and also excludes certain items as detailed later in this press release under the heading "Use of Non-GAAP Financial Measures.
Accounting for Income Taxes: Impact of FASB and IASB Domestic and Foreign ESOs, and Purchase Accounting
My team's job is to figure out how to integrate acquisitions into Microsoft and ensure we properly book the purchase accounting.
The three engineered materials plant closings will be included as part of the acquisition purchase accounting related to the consolidation of Geon and M.
Ira Zuckerman, an equity analyst with Nutmeg Securities, agreed, saying buyers will simply adjust their price to absorb the impact of purchase accounting.
AOL and Time Warner executives say purchase accounting will enable the new company, AOL Time Warner, to dispose of unproductive assets and conduct stock buybacks.
Burbank-based Disney also insisted that the purchase accounting principles for the Capital Cities/ABC deal were ``applied as they exist today, not as others might wish them to be.
2 billion, up 7% or 10% excluding purchase accounting adjustments.
In the case of purchase accounting, the valuation group must allocate a finite amount, the purchase price, to the assets.
Statement 141 on Business Combinations: 1) requires the use of purchase accounting for all business combinations initiated after June 30, 2001; and 2) provides new criteria for determining when intangible assets should be recognized separately from goodwill.
Use of the purchase accounting method will also bring the United States in step with other countries, because widespread use of the pooling-of-interests method is a U.
GMHE) today reported first quarter earnings, before the effect of purchase accounting adjustments related to General Motors' acquisition of Hughes Aircraft Co.