An accounting process that involves allocating the purchase consideration's fair value between the underlying tangible and intangible net assets of a company being acquired.
An arm's-length transaction refers to a deal where the parties involved act independently and in their own self-interest, ensuring fairness and equal standing for all involved.
The Asset Revaluation Reserve, often referred to as the Revaluation Reserve Account, represents the adjustments made to the value of a company's assets that are reflected on its balance sheet. This reserve is critical for accurately depicting the fair value of an entity's assets over time.
Understanding the difference between the fair value of the consideration given by an acquiring company when acquiring a business and the aggregate of the fair values of the separable net assets acquired, commonly referred to as consolidated goodwill.
Deemed cost represents a substituted value for the net book value of an asset when an entity transitions to a new accounting regime. This approach allows entities to treat assets as if initially recognized at this value on the specified date.
Fair value, often referred to as fair market value, is the estimated amount for which an asset or liability could be exchanged in an arm's length transaction between informed, willing parties. It plays an essential role in acquisition accounting, and is significant in accounting for derivatives and other complex financial instruments.
Detailed overview of investment properties, including definitions, examples, FAQs, related terms, and resources for further study.
Market Value is a financial metric that measures the value of an asset or company determined by the current market price of its shares or assets. Distinguished from book value, it reflects real-time valuation and investor sentiment.
A detailed explanation of Other Comprehensive Income (OCI), including its types, examples, related terms, and resources for further study.
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.
