Mergers and acquisitions are economically similar
BC29 Some observers, including some respondents to the ED 3 and to the 1999 Exposure Draft, argued that business combinations in which the predominant form of consideration is equity interests, generally referred to as mergers, are different from acquisitions and should be accounted for differently. They said that the pooling method is appropriate for a merger because ownership interests are continued (either completely or substantially), no new capital is invested and no assets are distributed, post‑combination ownership interests are proportional to those before the combination, and the intention is to unite commercial strategies. Those respondents said that a merger should be accounted for in terms of the carrying amounts of the assets and liabilities of the combining entities because, unlike acquisitions in which only the acquirer survives the combination, all of the combining entities effectively survive a merger.
BC30 Most respo
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