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Definition of push down accounting?

Open uri20170510 32134 7ezpi6?1494421819 asked

Hi Can I know, Definition of push down accounting?

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6 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 answered

-However, it is not an acceptable method under the International Financial Reporting Standard (IFRS). On the entity’s financial statements, push down accounting appears the same since for the financial reporting purpose of the group structure, the subsidiary and parent company’s accounts are consolidated. --Advantages of the push down accounting Push down accounting has two advantages: --With the help of push down accounting, it is impossible for the subsidiary to alter its accounts and report losses to the parent company.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 answered

--DEFINITION of 'Push Down Accounting' In accounting for mergers and acquisitions, the convention of accounting of the purchase of a subsidiary at the purchase cost rather than its historical cost. This method of accounting is required under U.S. GAAP, but is not accepted in IFRS accounting standards. --However, it is not an acceptable method under the International Financial Reporting Standard (IFRS). On the entity’s financial statements, push down accounting appears the same since for the financial reporting purpose of the group structure, the subsidiary and parent company’s accounts are consolidated.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 answered

> Push down accounting --DEFINITION of 'Push Down Accounting' In accounting for mergers and acquisitions, the convention of accounting of the purchase of a subsidiary at the purchase cost rather than its historical cost. This method of accounting is required under U.S. GAAP, but is not accepted in IFRS accounting standards. --However, it is not an acceptable method under the International Financial Reporting Standard (IFRS). On the entity’s financial statements, push down accounting appears the same since for the financial reporting purpose of the group structure, the subsidiary and parent company’s accounts are consolidated. **--Advantages of the push down accounting** **Push down accounting has two advantages:** --With the help of push down accounting, it is impossible for the subsidiary to alter its accounts and report losses to the parent company. --The other advantage of the push down accounting is that it simplifies the process of consolidation for the parent company.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 answered

1 Under U.S. GAAP, an acquirer of a business initially recognizes most of the acquired assets and liabilities at fair value. If the acquired business prepares separate financial statements, a question arises as to whether the historical basis of the acquired company or the “stepped-up basis” of the acquirer should be reflected in those separate financial statements. Pushdown accounting refers to the latter, which means establishing a new basis for the assets and liabilities of the acquired company based on a “push down” of the acquirer’s stepped-up basis. .2 Pushdown accounting typically results in higher net assets for the acquired company on the acquisition date because the assets and liabilities are “stepped-up” to fair value and goodwill is recognized. This in turn usually results in lower net income in periods subsequent to the acquisition due to higher amortization, higher depreciation, and potential impairment charges. Thanks

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 answered

In accounting, when entities are preparing accounts for acquisitions and mergers, the subsidiaries are usually purchased at their purchase cost rather than their historical cost. This technique of accounting is known as push down accounting. This method is a requirement under “Generally Accepted Accounting Principles”.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 answered

**PUSH DOWN ACCOUNTING** In accounting, when entities are preparing accounts for acquisitions and mergers, the subsidiaries are usually purchased at their purchase cost rather than their historical cost. This technique of accounting is known as push down accounting. This method is a requirement under “Generally Accepted Accounting Principles”. However, it is not an acceptable method under the International Financial Reporting Standard (IFRS). On the entity’s financial statements, push down accounting appears the same since for the financial reporting purpose of the group structure, the subsidiary and parent company’s accounts are consolidated.

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