FSA: pooling method higher, equity, method, liability

lunarfollies

when use pooling method, does both Asset and liability higher at historical cost ? so the equity is lower? Thanks.

comp_sci_kid

and no goodwill

eoin

yes, the two firms are combined as if they were always one; combined using historical book values. No write up to fair val. Also called "uniting-of-interests" method for obvious reasons.