Purchase accounting

Method of accounting for a merger in which the acquirer is treated as having purchased the assets and assumed liabilities of the acquiree, which are all written up or down to their respective fair market values, the difference between the purchase price and the net assets acquired being attributed to goodwill. The New York Times Financial Glossary

Financial and business terms. 2012.

Look at other dictionaries:

  • purchase accounting — Method of accounting for a merger that treats the acquirer as having purchased the assets and assumed the liabilities ( liability) of the acquiree, which are then written up or down to their respective fair market values. The difference between… …   Financial and business terms

  • purchase method — In the USA, a method of accounting for business combinations in which cash and other assets are distributed or liabilities incurred. The purchase method is used if the criteria are not met for the pooling of interests method. With the purchase… …   Accounting dictionary

  • accounting system — ➔ system * * * accounting system UK US noun ACCOUNTING ► [C] a particular way in which a company or organization records and reports its financial information: »Your accounting system needs to be designed to track costs and monitor all company… …   Financial and business terms

  • purchase requisition — A form, completed by a user department of an organization and issued to the purchasing department, requiring the latter to effect the purchase of the items specified in the requisition. The requisition usually includes the quantity and… …   Accounting dictionary

  • Accounting software — is application software that records and processes accounting transactions within functional modules such as accounts payable, accounts receivable, payroll, and trial balance. It functions as an accounting information system. It may be developed… …   Wikipedia

  • Accounting for leases in the United States — is regulated by the Financial Accounting Standards Board (FASB).Accounting for leases by the lesseeA lease is defined as a contractual agreement between a lessor and lessee that gives the lessee the right to use specific property, either owned by …   Wikipedia

  • purchase journal — ˈpurchase ˌjournal noun [countable] ACCOUNTING another name for purchase * * * purchase journal UK US noun [C] ACCOUNTING ► PURCHASE BOOK(Cf. ↑purchase book) …   Financial and business terms

  • Purchase Discount — is an offer from the supplier to the purchaser, to reduce the selling price if the payment is made within a certain period of time. For example, a purchaser brought a $100 item, with a purchase discount term 3/10, net 30. If he pays within 10… …   Wikipedia

  • Purchase price allocation — Purchase price allocation, or PPA, is an application of goodwill accounting whereby one company (the acquirer), when purchasing a second company (the target), assigns new values to the target s assets and liabilities based on the price paid.In… …   Wikipedia

  • purchase day book — purchase (day) book purchase (day) book ➔ book1 * * * purchase day book UK US noun [C] ACCOUNTING ► PURCHASE BOOK(Cf. ↑purchase book) …   Financial and business terms

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