Acquisition Adjustment

AAA

DEFINITION of 'Acquisition Adjustment'

The difference between the price an acquiring company pays to purchase a target company and the net original cost of the target utility company's assets. An acquisition adjustment is the premium paid for acquiring a company more than its tangible assets or book value.


Also known as "goodwill."

INVESTOPEDIA EXPLAINS 'Acquisition Adjustment'

Reasons why a company may want to pay more than the net tangible assets of another firm include the brand and other intangible assets that provide value to the firm. These can include patents, good customer relations, etc. All of this information can be found on the company's balance sheet.

RELATED TERMS
  1. Acquisition

    A corporate action in which a company buys most, if not all, ...
  2. Goodwill

    An account that can be found in the assets portion of a company's ...
  3. Asset Acquisition Strategy

    The purchase of a company by buying its assets instead of its ...
  4. Purchase Acquisition

    An accounting method used in mergers and acquisitions with which ...
  5. Mergers And Acquisitions - M&A

    A general term used to refer to the consolidation of companies. ...
  6. Legal Monopoly

    A company that is operating as a monopoly under a government ...
Related Articles
  1. Mergers And Acquisitions: Understanding ...
    Fundamental Analysis

    Mergers And Acquisitions: Understanding ...

  2. Analyzing An Acquisition Announcement
    Investing Basics

    Analyzing An Acquisition Announcement

  3. Key Players In Mergers And Acquisitions
    Fundamental Analysis

    Key Players In Mergers And Acquisitions

  4. Mergers & Acquisitions: An Avenue For ...
    Forex Education

    Mergers & Acquisitions: An Avenue For ...

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center