Asset stripping involves acquiring a company whose share price is undervalued relative to its asset value, selling its assets for profit, typically at the expense of other stakeholders.
Contingent consideration refers to a payment made as part of a business acquisition that is contingent on future events. This concept is commonly used in earn-out agreements.
Lock, stock, and barrel is an idiomatic expression originating from the components of a rifle, signifying the entirety of something, often used to describe the complete acquisition or involvement in a business or endeavor.
Purchased Goodwill represents the premium amount paid over the fair value of the identifiable net assets during the acquisition of a company, reflecting the value of the company’s brand, customer base, and other intangible elements.
Valuation risk refers to the uncertainties and potential errors that arise when determining the fair value of an asset, liability, or business. This risk can occur in various scenarios, such as during the acquisition of a business or the valuation of over-the-counter market options.
Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.