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  2. Purchase price allocation - Wikipedia

    en.wikipedia.org/wiki/Purchase_price_allocation

    Purchase price allocations are performed in conformity with the purchase method of merger and acquisition accounting. In the United States, a second method (known as the pooling or pooling-of-interests method) was discontinued after the issuance of the Statement of Financial Accounting Standards No. 141 “Business Combinations” (“ SFAS 141 ...

  3. Goodwill (accounting) - Wikipedia

    en.wikipedia.org/wiki/Goodwill_(accounting)

    In order to acquire company B, company A paid $20. Hence, goodwill would be $11 ($20 − $9). The journal entry in the books of company A to record the acquisition of company B would be: [2] DR Goodwill $11 DR Accounts Receivable $10 DR Inventory $5 CR Accounts Payable $6 CR Cash $20

  4. Book value - Wikipedia

    en.wikipedia.org/wiki/Book_value

    An asset's initial book value is its actual cash value or its acquisition cost. Cash assets are recorded or "booked" at actual cash value. Assets such as buildings, land and equipment are valued based on their acquisition cost, which includes the actual cash cost of the asset plus certain costs tied to the purchase of the asset, such as broker fees.

  5. How Companies Fake It (With Cash Flow) - AOL

    www.aol.com/news/2011-07-27-how-companies-fake...

    Through the magic of acquisition accounting. When one company acquires another, it uses cash (investing outflow) from its balance sheet, or cash from borrowing (financing inflow) or from issuing ...

  6. Consolidation (business) - Wikipedia

    en.wikipedia.org/wiki/Consolidation_(business)

    In business, consolidation or amalgamation is the merger and acquisition of many smaller companies into a few much larger ones. In the context of financial accounting, consolidation refers to the aggregation of financial statements of a group company as consolidated financial statements.

  7. Historical cost - Wikipedia

    en.wikipedia.org/wiki/Historical_cost

    For example, a company acquires an asset in year 1 for $100; the asset is still held at the end of year 1, when its market value is $120; the company sells the asset in year 2 for $115; At the end year 1 the asset is recorded in the balance sheet at cost of $100. No account is taken of the increase in value from $100 to $120 in year 1.

  8. Deferred acquisition costs - Wikipedia

    en.wikipedia.org/wiki/Deferred_Acquisition_Costs

    Establishment of the DAC asset tends to reduce the policy’s first year strain and generally produces a smoother pattern of earnings. To meet the capitalization criteria, these expenses must vary with and be primarily related to the acquisition of new business. Examples of DAE: Commissions in excess of ultimate commissions; Underwriting costs

  9. Amortization (accounting) - Wikipedia

    en.wikipedia.org/wiki/Amortization_(accounting)

    Amortization is the acquisition cost minus the residual value of an asset, calculated in a systematic manner over an asset's useful economic life. Depreciation is a corresponding concept for tangible assets. Methodologies for allocating amortization to each accounting period are generally the same as those for depreciation.