M&A Accounting

A business combination can be effected as either an asset acquisition or a stock acquisition. Asset acquisition The acquirer buys some or all of the...

There are three possible ways to account for the investment by one company in the common stock of another, depending on the resulting degree of influence...

When Company A (the investor) has significant influence over Company B (the investee)—but not majority voting power—Company A accounts for...

In December 2007, the FASB introduced FAS 141r and FAS 160, changing longstanding accounting rules for business combinations and noncontrolling (minority)...

Equity Purchase Price The first step in purchase price allocation, or PPA, is to determine the purchase price. Also known as the transaction price/value,...

Let's now consider some slightly more advanced purchase price allocation (PPA) topics related to the fair valuation of assets acquired and liabilities...

Purchase Price Allocation Under the Equity Method In an M&A context under the equity method of accounting, we record the initial investment in an...

Noncontrolling interest (NCI) is the portion of equity ownership in a subsidiary not attributable to the parent company, who has a controlling interest...

FASB Interpretation No. 44 ("FIN 44") governs the accounting treatment of stock options in business combinations, among other transactions involving...