Goodwill, Combinations, and Consolidation

This subsection groups business-combination vocabulary that affects reported assets, equity, and post-acquisition analysis.

In this section

• Acquisition Accounting and Purchase Methods
  Business-combination accounting methods used to record acquisitions, purchase allocations, and predecessor consolidation approaches.
  • Acquisition Accounting: Procedures for Company Takeover
    The accounting procedures followed when one company is taken over by another, including the allocation of the fair value of purchase consideration, and the treatment of goodwill.
  • Acquisition Method: Accounting in Business Combinations
    The acquisition method is the current method for accounting in business combinations, focusing on recognizing the fair value of assets and liabilities.
  • Pooling of Interests: Combining Financial Statements in Mergers
    The Pooling of Interests method is a historical accounting practice for mergers where the balance sheets of the two companies are combined without revaluing the assets and liabilities.
  • Purchase Method: Accounting for Business Combinations
    An in-depth explanation of the Purchase Method, an accounting approach for business combinations used in the USA. The method involves recognizing net assets at their fair value and recording any excess purchase price as goodwill.
• Goodwill and Consolidation Methods
  Goodwill and consolidation concepts used when acquisitions create intangible value or partial ownership accounting questions.
  • Goodwill
    Goodwill in accounting: the acquisition premium paid above identifiable net assets, why it appears on the balance sheet, and why it matters after a business combination.
  • Gross Equity Method: Accounting for Associated Undertakings
    The Gross Equity Method is a technique of accounting where an investor reflects its share of the associated entity's aggregate gross assets and liabilities on the balance sheet. The profit and loss account notes the share of the turnover.
  • Internally Generated Goodwill
    Internally generated goodwill in accounting: reputation, brand, and customer value created inside a business but usually not recognized as a separate balance-sheet asset.
  • Negative Goodwill
    Negative goodwill in accounting: a bargain-purchase outcome where the acquirer pays less than the fair value of identifiable net assets.
  • Proportional Consolidation: A Detailed Overview
    Proportional Consolidation is a method of consolidation used in group accounts where subsidiaries are not fully owned, and a proportionate share of each category of joint venture revenue, expenditure, assets, and liabilities is included line by line.