The M&A Game Changes.(mergers and acquisitions accounting regulations)

Financial Executive, October, 2001 by Ivancevich, Susan H.; Rockness, Howard O.; Rockness, Joanne W.

The FASB has revised the rules for merger accounting, and the result in the short term may be a lot of confusion.

It has finally happened: Twenty-five years after its first discussion memorandum on accounting for business combinations and intangibles (Aug. 19, 1976), the Financial Accounting Standards Board has issued Statements 141 and 142, doing away with pooling of interests. Apparently, it took an extremely volatile stock market to finally bring resolution to 1970 accounting rules that frequently triggered a structuring of combinations inconsistent with economic reality or sound business practices.

To gain the corporate community's acceptance for the highly controversial rule, the FASB in early spring softened the blow by attaching the elimination...

Read the rest of this article with a Free Trial at HighBeam Research.

Premium Content Partnership | HighBeam Research provides an in-depth online archive library of reference works.