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Acquisition |
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An
accounting method used in mergers and acquisitions where the purchasing
company treats the target firm as an investment and adds the company's
assets to its own at fair market value.
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If
the amount paid for a company is greater than fair market value, the
difference is reflected as goodwill. Because goodwill must be written
off against future earnings this makes the pooling of interests method
to be preferable. |
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