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Purchase accounting without goodwill two‐step falls out of style
Author(s) -
Ditman Stephen M.
Publication year - 1990
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.3970020204
Subject(s) - goodwill , publicity , accounting , database transaction , business , economics , marketing , computer science , programming language
Abstract Fueled by the publicity generated from the Dow Chemical‐Marion Laboratories transactions in 1989, the business and financial community's interest in a new and creative form of business combination, which appeared to result in “purchase accounting without goodwill,” continued to gain momentum through the first half of 1990. However, the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB) effectively squelched the concept of “purchase accounting without goodwill” via a series of consensuses in July and September 1990. The effects of these consensuses are analyzed in this article, using the Dow‐Marion transaction for illustrative purposes.