Mergers and acquisitions accounting - final

Mergers and acquisitions (common known as M&A) are business transactions where one company becomes owner or joined of other one. This transactions are worldwided mostly during 80's of 20th century. Most of this action are done by US companies. Undertaking mergers and acquisitions companies takeover all assets and funds of merged company, and all it's elements. It means that books of these two companies suppose to be adjusted one to another, or to recalculate figures from balance sheet and income statement. This process sometimes requires a lot of time, in some cases measured in years. Because of that, we will, in this paperwork, give some explanations and principles of mergers and acquisions accounting.

In first part of this study, we will give some theoretical attitudes, and explain some distinguish between mergers and acquisition, and also to give some reasons why some companies doing this transactions. In second part, we will discuss about barriers which accountants can be faced in process of merging and acquiring of other companies.

Introduction……………..…3
I. Mergers and acquisitions – theory…………………4
II. Merger and acquisition – accounting………..5
II.1.Purchase method………………..7
A. General principles………………...7
B. Treatment of business acquisition expenses……8
C. Determining a fair value of acquired assets and liabilities…..8
D. Treatment of minor interests…………...9
E. Special questions connected to positive goodwill………10
References………..11