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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
One of the primary issues in the evolution of M&A accounting has been the use of the "pooling of interests" method.
FAS 141 requires the use of the purchase method of accounting for all business combinations and prohibits the pooling of interests method.
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.
An exchange of a business for a business is a business combination; the pooling of interests method would not be used to account for any business combinations.
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.
But the US Securities and Exchange Commission has allowed companies which had accounted for business combination transactions as a pooling of interests to repurchase shares for five business days following the reopening of US equities markets.
That $2.2 billion pooling of interests enhanced Goodrich's landing gear business, launched its engineered industrial products segment and bolstered its stance against aerospace rivals like Lockheed Martin and United Technologies.
16, Business Combinations, allows firms to account for their combinations either as purchases or pooling of interests. Critics argue that these options permit economic events that are essentially similar to be accounted for in very different ways.
Pursuant to the acquisition, which is structured as a tax-free reorganization for US federal income tax purposes and intended to be accounted for as a pooling of interests, each share of PairGain's common stock will be converted into 0.43 share of ADC common stock.
96, Treasury Stock Acquisitions Following Consummation of a Business Combination Accounted for as a Pooling of Interests. SAB no.
AIG completed its $18 billion SunAmerica acquisition, billed as a pooling of interests, on Jan.