Pitfalls in New Merger Accounting

Compliance WeekVol. 7 Nbr. 72, January 2010

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Summary


"That's an incredibly burdensome task," he says. "There's a possibility that the effort around that is not justified." Companies that conclude that no material difference exists might decide to follow prior accounting practices using a more aggregated approach, he says.

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Pitfalls in New Merger Accounting

Corporate America has now had a full year to adjust to new rules that radically changed how mergers and acquisitions are accounted for. It's been a bumpy ride, and at least some companies have found themselves stuck in valuation sinkholes.

The rules went into effect at the start of 2009 as Financial Accounting Standard No. 141(R), Business Combinations (subsequen...

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