CFA4Techie

Purchase Method:
- Assets purchased are written up to market level, resulting in higher asset value and depreciation going forward = lower profit margin than combination of two companies
Pooling of Interests Method:
- Companies treated as always being one company. Everything is restated. Asset value no different from combined historical asset values = same depreciation as combined companies = profit margin is simply weighted average of two companies pre-merger
That’s what I know. Anyone else have anything more?