Business combinations accounting in the United States from AICPA to FASB: a study on the impact on M&A activity

This paper summarizes the problematic of accounting for business combinations since the 1960s. Albeit widely supported by the industry, the use of pooling of interests has been always subject to criticism, particularly from practitioners and academicians (see e.g. AAA, 1966; Mosich, 1968). In 1996, FASB added business combinations accounting to its agenda, with the purpose to improve its transparency. FASB would disallow the use of pooling of interests, despite numerous negative reactions from industry. Nevertheless, a later proposal of replacement of purchased goodwill amortization by impairment testing seems to have mitigated any outstanding criticism. Several authors (e.g. Zeff, 2002) described the fierceness of the lobbying on this FASB’s project. The paper studies whether SFAS 141 and SFAS 142 resulted in relevant economic consequences (see e.g. Zeff, 1978; Burchell et al., 1980; FASB, 1980) and finds that M&A activity has not been significantly affected by FASB’s change

Companies and professional boards’ reactions to new M&A accounting in the USA

Following G4+1 recommendations issued after a meeting in 1998, the Financial Accounting Standards Board (FASB) reshaped dramatically in 2001 the accounting for business combinations, which had remained unchanged for thirty years in the USA. With the publication of SFAS 141, FASB dropped pooling of interests method in favour of purchase method and with SFAS 142 amortization of goodwill recognized as result of a business combination was replaced by impairment tests. Business combinations includes a wide range of deals, such as mergers and acquisitions (M&A), and is arguably one of the most polemic accounting topics ever. AICPA APB opinions issued in 1970 seemed to have praised almost everybody – difficult task given the different views about the most appropriate practice to adopt – although some prominent authors, such as Stephen Zeff, remained opponents of pooling of interests. Others always defended that pooling was the fair method for the real and true mergers and therefore strongly disagreed with G+1 and FASB views, stressing that the new rules would turn impracticable some mergers deals with specific characteristics. The FASB certainly did not intend to change the M&A market dynamic through its new set of accounting rules. Nevertheless, the critical voices raised against the pooling method ban suggested that the M&A activity could have been affected. Therefore, the authors of this paper considered relevant to discuss potential impacts of this new standards. Preliminary results obtained with questionnaires sent to firms included in S&P 500 index will be also presented.London Metropolitan Universit

Accounting for business combinations: (Un)desirable uniformity?

For many years, two methods existed alongside each other in the USA to account for business combinations: the pooling of interests method, applied to operations, such as mergers, that met all the conditions as stated at APB Opinion No. 16; and the purchase method for all other combinations. This dual accounting status was also widespread through many other countries, although some included substantial GAAP differences (e.g. USA versus UK) or applied restrictions to the application of those methods. The 1998 G4+1 Position Paper concerning business combinations recognized the inconvenience of this diversity in accounting and recommended the use of a single method, preferably the purchase method. Following a long period of discussion and controversy, as is usual when the business combinations topic is on the table, FASB published in 2001 the SFAS No. 141, which confirmed the purchase as the unique method for business combinations accounting. Simultaneously FASB also issued SFAS No. 142, which replaced goodwill amortization for impairment tests. In the meantime, IASB also started a business combinations project scheduled in two phases. The first has produced already IFRS 3, issued in March 2004, which also determined the purchase method as the single way for business combinations. The second phase is still in course and will provide guidance about the purchase method application (or ‘acquisition method’, as the board meanwhile decided to rename it). Once again, this topic has proved to be a very fertile ground for discussions, as IASB apparently dropped the ‘fresh start’ application and issued an ED with proposed amendments for the recently published IFRS 3. In the UK, business combinations accounting is still ruled by FRS 6 and FRS 7, which are not aligned with IFRS 3 and further IASB proposals. ASB is monitoring the IASB project and it is very likely to adopt its GAAPs, which means that business combinations accounting in the UK will change very soon. The accounting trend for business combinations seems now clear, but many questions remain, such as, was the pooling of interests method ban a major loss? Which challenges arise from replacement of goodwill amortization for impairment tests? With this paper the authors intend to discuss how and if business combinations accounting uniformity is indeed desirable, highlighting advantages and disadvantages, benefits and eventual problems for professionals and stakeholders. A final note to stress is that this paper deals with uniformity of business combinations accounting and not with international accounting harmonisation, to which we are required to refer since it is inherent to recent developments within this topic.The Institute of Chartered Accountants in England and Wale

Enlivenment and the Gruffalo; the unfolding story of events in destination shopping centres

Purpose The purpose of this paper is to investigate the growing, and multifaceted, role for events within destination shopping centres. With particular focus upon The Gruffalo experience (GE)—a three week pop-up experiential children’s activation—the study offers insights and provides a conceptual framework, relating to the emerging and future role of events. Design/methodology/approach The study emerged from a privileged opportunity to research The GE, enabling a visitor questionnaire survey (n=1,305), using a non-probability sample, and four in-depth interviews, which were extended by an additional seven respondents. Findings There is a noteworthy role for events as “enlivenment”; attractors to increase visitation, repeat visitation and equally to impact dwell time and boost footfall and sales for tenants. The study revealed a need for a developed event portfolio, with various fundamental tensions relating to objectives, tenants, integration with wider strategy and customer experience. Research limitations/implications By interlinking events with shopping, re-visitation intention is improved and therefore not only does it deliver short-term return but longer-term payback. The vast assortment of events, and stakeholders, means a strategic and reflective approach is required. A limitation of the study is that there is limited existing research on this topic upon which to compare the overall findings, or specifically the survey data and analysis. Originality/value This early research study into events within destination shopping centres has revealed a prolific and advantageous, but also emerging and intricate, relationship. There is an absence of extant literature and therefore this paper makes a notable contribution to this unfolding area

Eltrombopag for the treatment of chronic idiopathic (immune) thrombocytopenic purpura : A Single Technology Appraisal

Evidence Review Group (ERG) final report for the National Institute for Health and Clinical ExcellencePublisher PD

Corporate social responsibility: part II - performance evaluation, globalisation and NFP’s

1st edition, ©201

Stimulation of bone growth with thrombin peptide derivatives

Disclosed is a method of stimulating bone growth at a site in a subject in need of osteoinduction. The method comprises the step of administering a therapeutically effective amount of an agonist of the non-proteolytically activated thrombin receptor to the site.Board of Regents, University of Texas Syste

Developments in deep brain stimulation using time dependent magnetic fields

The effect of head model complexity upon the strength of field in different brain regions for transcranial magnetic stimulation (TMS) has been investigated. Experimental measurements were used to verify the validity of magnetic field calculations and induced electric field calculations for three 3D human head models of varying complexity. Results show the inability for simplified head models to accurately determine the site of high fields that lead to neuronal stimulation and highlight the necessity for realistic head modeling for TMS applications

Transcranial magnetic stimulation of mouse brain using high-resolution anatomical models

Transcranial magnetic stimulation (TMS) offers the possibility of non-invasive treatment of braindisorders in humans. Studies on animals can allow rapid progress of the research including exploring a variety of different treatment conditions. Numerical calculations using animalmodels are needed to help design suitable TMS coils for use in animal experiments, in particular, to estimate the electric field induced in animal brains. In this paper, we have implemented a high-resolution anatomical MRI-derived mouse model consisting of 50 tissuetypes to accurately calculate induced electric field in the mouse brain. Magnetic field measurements have been performed on the surface of the coil and compared with the calculations in order to validate the calculated magnetic and induced electric fields in the brain.Results show how the induced electric field is distributed in a mouse brain and allow investigation of how this could be improved for TMS studies using mice. The findings have important implications in further preclinical development of TMS for treatment of human diseases