Is anyone else confused by all the different rules between purchase method vs acquisition method between US GAAP and IFRS?
The CFAI text is so badly written in my opinion. All the rules are scattered all over the place. No single rule is hard to understand. But I am having trouble knowing which rules belong to which method.作者: dkishore1 时间: 2013-4-17 19:57
Seems alot easier to me this year than last year. As far as I’m concerned, the only point we have to remember is in relation to using full (US GAAP) or partial (IFRS) goodwill.作者: scruge 时间: 2013-4-17 19:57
I thought GAAP and IFRS both got rid of purchase method and its now “acquisition method”?
IFRS uses partial or full
GAAP uses full goodwill only
What if firm A bought 80% of firm B’s shares but had no board members or decision making? this would be accounted for using acquisition method correct? The 80% ownership counts as control?作者: transferpricing 时间: 2013-4-17 19:57
Are we responsible for knowing the purchase method even after it has been replaced by the acquisition method? Thanks.作者: ShooterMcCFA 时间: 2013-4-17 19:57
Dude purchase method is the same as acquisition method no?作者: SeanWest 时间: 2013-4-17 19:57
That is why I said I am confused. There is the old purchase method and the new acquisition method. Then there are differences between US GAAP and IFRS…..作者: PalacioHill 时间: 2013-4-17 19:57
The Old PURCHASE method is HISTORY!作者: TheMBAGlover 时间: 2013-4-17 19:57
OMG! the acquisition method is the new purchase method
Totally! and red is the new orange!作者: scruge 时间: 2013-4-17 19:58
Thanks guys. It is a relief to know that I can ignore the old method.作者: LPoulin133 时间: 2013-4-17 19:58
Historically (prior to June 2001), two accounting methods were used for business combinations: 1) pooling interests method 2) purchase method.
Over the last few years, the pooling method has been eliminated from US GAAP and IFRS. Although, as analysts, we must still be aware of the pooling method as many companies accounted for acquisitions under the pooling method.
Now, we have the acquisition method. Both US GAAP and IFRS require that the acquirer measure the identifiable assets and liabilities of the acquiree at FAIR VALUE as of the date of the acquisition.
I hope this clears things up.
