Acquisition Analysis: Steps, Reasons, and Benefits

Running Head: ACQUISITION ANALYSIS 1
ACQUISITION ANALYSIS

Running Head: ACQUISITION ANALYSIS
Table of Contents
Overview.................................................................................................................... 3
Steps.......................................................................................................................... 3
Reasons or benefits.................................................................................................... 4
Conclusion.................................................................................................................. 6
References..................................................................................................................... 7

Running Head: ACQUISITION ANALYSIS
Overview
Acquisition analysis is nothing but a term where the two companies come together mutually and
one of them takes over the other for the benefit of both of them. Acquisition Analysis is a
specialized investigation and being in the language of the business it refers to the merger or
securing of the littler organizations into less enormous ones. With regards to the perspective of
the financial accounting, consolidation means the amalgamation of the entities. Under the reason
for the tax assessment the elements are analyzed with the end goal of calculation of the amount
of the tax (Soundarya, Lavanya and Hemalatha, 2018).
Steps
There is a set patter or say number of the steps that needs to be followed in order to have the
Acquisition. The process that has been followed in case of the Ethan and Darren Limited was as
follows (Schmidt, 2015).
The first step is to find the value of the net identifiable assets as well as the liabilities of the
Darren Limited. Under this step the tangible as well as the intangible assets are measured
keeping in mind the reduction of the tax as well.
Net fair value of the identifiable
assets and liabilities of Darren Limited
Equity $ 54,000.00
Retained earnings $ 36,000.00
Asset Revaluation Surplus $ 18,000.00
$ 108,000.00
Plant $ 1,050.00
Inventory $ 1,400.00
Total $ 110,450.00
Consideration Transferred $ 110,000.00
Gain on bargain and purchase $ 450.00