In short
Push-down accounting means an acquired company uses the acquirer's new basis (fair values at acquisition, including goodwill) in its own separate financial statements.
Key takeaways
- An acquiree may elect it whenever an acquirer obtains control of it.
- Any bargain purchase gain is recognized in additional paid-in capital, not income, in the acquiree's statements.
- It makes the subsidiary's statements consistent with the amounts in the parent's consolidated statements.
Where it's tested
BAR: Business Combinations (Advanced) — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Push-down accounting, when applied, results in: