Merger accounting - the red herring

Article Abstract:

The economic advantages of accounting for a business combination as either a merger or an acquisition are discussed. Merger accounting, in general, is preferred since it most often will allow greater profits for shareholders under British accounting standards. An examination of three hypothetical examples of business combinations (and the accounting thereof) calls this premise into question. The accounting issues analyzed in this examination include: merger reserves, consolidation of goodwill, distributions of profit, fair and market values of assets, and the effects of merger and acquisition accounting on balance sheet accounts.

Acquisitions and mergers, Corporate reorganizations

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The deference due to ED 39?

Article Abstract:

ED 39, Accounting for Pension Costs, contains provisions for surpluses or deficits in regular pension costs that have an important impact on deferred taxes. ED 39 proposes an income approach rather than a balance sheet approach, like SSAP-15 and SSAP-9. A balance sheet approach would be more appropriate and consistent, and would eliminate deferred tax considerations.

Pensions

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Just one small step for the ASC...

Article Abstract:

The issue of whether the Institute of Chartered Accountants in England and Wales should have a conceptual framework for the setting of accounting standards is discussed. Four basic accounting concepts stated in SSAP 2 are: going concern, accruals/matching, consistency, and prudence. These concepts are analyzed.

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