What is Acquisition Accounting

Acquisition Accounting or Purchase Accounting shows the process of acquiring of one acquiree business’s Assets, Liabilities, Non-Controlling Interest (NCI) and Goodwill by acquirer or purchasing company under Purchase Price Allocation. The Acquirer will purchase the business of Acquiree company if the purchase value is more than the sum of fair market value of Identifiable Assets (Tangible Assets And Intangible Assets Except Goodwill), and fair market value of Liabilities assumed.

After the acquisition that takes place between acquirer and acquiree either for merger, acquisition or some other business combinations, the assets and liabilities of acquiree’s business now are shown on the Financial Statements of Purchasing Company.