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5#
发表于 2013-4-17 18:18
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Pooling is very simple, as stated above, everything is just added together and it’s as though the two firms were always one.
Purchase method - here some keys:
On the balance sheet:
Assets are almost always increased as everything is written up to fair value, depreciation is also increased as a result as it is this new, higher value of assets that is depreciated. Ratios with assets in the denominator will almost certainly decrease relative to pooling method.
Liabilities will increase if debt is used to finance the purchase. Liabilities will also be affected by the discount/premium created by recognizing newly acquired liabilities at fair value.
Equity - Acquired firm’s equity is eliminated, so retained earnings will be lower than under pooling method.
If new stock is issued to finance, then shareholders equity will increase by market value of equity.
Revenue and expenses of acquired firm are included from date of acquisition. |
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