Accounting for acquisitions and mergers: a unified approach

Article Abstract:

The differences between merger and acquisition accounting are described. Acquisitions are business combinations in which one firm dominates or controls another, while mergers involve confederation or pooling of interests. An acquired company contributes to group profits only after the combination of entities, while all pre-combination profits are included in merger accounting. Acquisition accounting allows holding company investments to be recorded at market value, while merger accounting involves recording the investment at nominal value, with liabilities and assets not re-valued. Merger accounting is used by a small, but growing minority of UK and US firms. France, Italy, Germany, Japan, and Australia still do not recognize or allow merger accounting.

Methods, Acquisitions and mergers, Accounting and auditing, Accounting

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Corporate reports: the potential for change

Article Abstract:

The Institute of Chartered Accountants of Scotland's 1988 report 'Making Corporate Reports Valuable' (MCRV) was followed-up in 1991 by a survey of 300 major UK companies to assess if companies were already practising the proposals promoted by MCRV. The survey, which covered both annual and non-periodic corporate reports, revealed a surprisingly wide range of high quality voluntary disclosures that were consistent with MCRV proposals. These disclosures were primarily in such areas as: market capitalization, market shares, segment information on assets, and share price trends. Takeover documents were found to reveal more in-depth information, indicating a willingness by companies to disclose key information when needed.

Professional organizations, Standards, United Kingdom, Reports, Corporations, Corporation reports, Company reports, Financial disclosure, Corporations, British, Institute of Chartered Accountants of Scotland

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