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Technical note
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Reference no. 296-004-6
Published by: Babson College
Originally published in: 1996
Version: 13 Mar 1996
Length: 11 pages
Data source: Generalised experience

Abstract

This technical note describes the US accounting treatment for the purchase and sale of stock in firms. It examines GAAP (generally accepted accounting principles) requirements for investments in securities, including minority passive investments, minority active investments and majority active investments. In addition, it delineates the pooling of interests and purchase methods of accounting for corporate acquisitions. It can be used to support cases concerning mergers and acquisitions, spin-offs and other purchases and sales of stock in firms.

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Abstract

This technical note describes the US accounting treatment for the purchase and sale of stock in firms. It examines GAAP (generally accepted accounting principles) requirements for investments in securities, including minority passive investments, minority active investments and majority active investments. In addition, it delineates the pooling of interests and purchase methods of accounting for corporate acquisitions. It can be used to support cases concerning mergers and acquisitions, spin-offs and other purchases and sales of stock in firms.

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