An accounting process that involves allocating the purchase consideration's fair value between the underlying tangible and intangible net assets of a company being acquired.
The bringing together of separate economic entities as a result of one entity uniting with, or obtaining control over, the net assets and operations of another.
Fair value, often referred to as fair market value, is the estimated amount for which an asset or liability could be exchanged in an arm's length transaction between informed, willing parties. It plays an essential role in acquisition accounting, and is significant in accounting for derivatives and other complex financial instruments.
A negative consolidation difference is a term used in acquisition accounting to represent a credit balance, often reflecting negative goodwill.
Purchase accounting, also known as acquisition accounting, is the method used in financial accounting to consolidate the financial statements of two companies when one company acquires another. It involves revaluing the acquired company's assets and liabilities to fair value and recognizing goodwill, if any, in the consolidated financial statements.
