Purchase Method of Accounting for Controlling Interest Investments or Acquisitions

Under the purchase method, the assets and liabilities of the acquired company are combined onto the financial statements of the acquiring company at fair market values on the transaction date.

Steps in the purchase method (note that the process starts with the balance sheet and ends with the income statement):

NOTE: The process of creating a consolidated balance sheet and income statement through the purchase method is time consuming and requires practice.  Candidates are advised to begin by practicing problems with notes and books available and gradually building proficiency to the point of successfully completing the process without assistance.

Get smart about tech at work.

As a non-technical professional, learn how software works with simple explanations of tech concepts. Learn more...


Data Science for Finance Bundle: 43% OFF

Get our Data Science for Finance Bundle for just $29 $51.
Get it now for just $29

Checkout our eBooks and Templates

eBooks and templates related to finance, R programming, Python, and Excel.
Visit Store
Get our Data Science for Finance Bundle for just $29 $51. That's 43% OFF.
Get it for $51 $29