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Finance Dictionary and Glossary of Investment Terms
purchase acquisition
Definition 1.
Accounting method used in any merger which is not treated as a pooling of interests. The purchasing company treats the acquired as an investment, adding the acquired's assets to its own balance sheet, and recording any premium paid above market price as goodwill, to be charged against future earnings.
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Definition 2.
An accounting method used in mergers and acquisitions where the purchasing company treats the target firm as an investment, adding the company's assets to its own at fair market value.
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