Abiblo Finance - Acquisition Accounting
Mostly when one company is taken by another, acquisition accounting is the procedure that need to be considered. In the form of consolidated financial statement, the fair value of the purchase consideration should be allocated between the not intangible and tangible assets. The difference between fair value of the purchase consideration and the fair value aggregate of the separable net assets will represent goodwills. The acquired company should be placed on to the consolidated profit and loss account from the acquisition date.