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  2. Purchase acquisition accounting is a set of guidelines for recording the purchase of a company on the consolidated statements of financial position of the company that buys it. This is the standard documentation for recording the assets and liabilities of a company with subsidiaries.
    www.investopedia.com/terms/p/purchaseacquisition.asp
    www.investopedia.com/terms/p/purchaseacquisition.asp
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    What is purchase acquisition accounting?Purchase acquisition accounting is a method of reporting the purchase of a company on the balance sheet of the company that acquires it. It treats the target firm as an investment. There is no pooling of assets. Rather, the assets of the target firm are added to the balance sheet of the acquirer at a price that reflects their fair market value.
    What is purchase accounting?Purchase accounting helps ensure that these changes are accurately reflected in the acquiring company’s financial statements. There are two primary types of purchase accounting: pooling of interests (POI) and acquisition method (AM). POI was commonly used in the past but has since been phased out due to changes in accounting regulations.
    Why is purchase accounting important for business acquisitions?When it comes to business acquisitions, purchase accounting plays a crucial role in accurately reflecting the financial position of the acquiring company. This method provides several benefits that can help companies make informed decisions and improve their overall financial reporting.
    What is the difference between purchase method and acquisition accounting?Under the purchase method, the difference between the acquired company's fair value and its purchase price was recorded as negative goodwill (NGW) on the balance sheet that was to be amortized over time. In contrast, with acquisition accounting, NGW is immediately treated as a gain on the income statement .
     
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