A major part of this controversy centered on whether to continue to require or permit pooling of interests accounting
under Accounting Principles Board [APB] Opinion No.
As pooling of interests accounting
evolved, many complexities and issues were introduced into structuring business combinations.
Absent evidence that a business combination did not entail a change in control, the Committee believes that pooling of interests accounting
would allow preparers to ignore the costs of acquiring control in the subsequent accounting.
Those standards (SFAS 141 and 142) eliminated pooling of interests accounting
and did away with amortization of goodwill, but required acquirers to appropriately allocate the purchase price to identifiable intangible assets.
He also includes a section discussing the intricacies of accounting for a business combination using pooling of interests accounting
, and, lastly, a section reviewing various aspects of executive employment contracts.
The publicity surrounding these statements brings to mind the adage "watch what we do, not what we say." These statements are billed as eliminating pooling of interests accounting
, a laudable goal.
said: "There has been no disproportionate surge in pooling transactions, no loosening of the qualifying rules, no hijacking of the pooling method by unscrupulous financiers," and, contrary to "...incorrigibly uninformed" media reports, "pooling of interests accounting
is neither 'disreputable' nor 'ridiculous' nor 'very popular' nor 'sweetheart accounting.'"
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.
What are the differences between purchase and pooling of interests accounting
? Should the choice of accounting method be of concern to analysts, investors, or others interested in business activity?
It was noted previously that pooling of interests accounting
normally results in higher--and often much higher--earnings than when purchase accounting is used.
114] states that "(the) elimination of pooling of interests accounting
results in comparability in accounting for business combinations.
The most recent examples of this phenomenon are hearings and committee activity on the proposed standards dealing with business combinations and the elimination of pooling of interests accounting
. The specter of direct government intervention in standards setting will always exist, but Leisenring perceives political pressure by special interests as generally ineffective.