Evolving Standards of Fair Value and Acquisition Accounting

Stephen Bryan, Steven Lilien, Bharat Sarath and Yan Yan

Chapter 18 in Information for Efficient Decision Making:Big Data, Blockchain and Relevance, 2020, pp 525-543 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Many of the new accounting standards that have been enacted over the past two decades have not only impacted accounting on their own but also interacted with the existing standards in unanticipated ways, particularly since many of the new standards require managerial estimates to be incorporated into the financial statements. As an illustration, we focus on the interaction between the adoption of fair value assessments and the use of acquisition method accounting (formerly called purchase accounting). We highlight the unusual effects on goodwill measurement. After explaining why this combination is potentially problematic, we provide examples of how these standards are being implemented in practice.

Keywords: Accounting; Decision Making; Economic Information; Stock Trading; Acquisitions; Mergers; Financing Reporting; Reliable Information; Company Decisions (search for similar items in EconPapers)
JEL-codes: A1 M41 (search for similar items in EconPapers)
Date: 2020
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