Acquisition Adjustment

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."

BREAKING DOWN '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.

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RELATED FAQS
  1. Why is the amount of net tangible assets an important benchmark?

    Find out more about net tangible assets, how to calculate net tangible assets and the importance of net tangible assets and ... Read Answer >>
  2. What happens to the stock prices of two companies involved in an acquisition?

    When a firm acquires another entity, there usually is a predictable short-term effect on the stock price of both companies. ... Read Answer >>
  3. How are net tangible assets calculated?

    Learn about net tangible assets, what it measures and how to calculate a company net tangible assets using examples. Read Answer >>
  4. What is the difference between goodwill and tangible assets?

    Find out about tangible and intangible assets, and understand how intangible assets, such as goodwill, do not take physical ... Read Answer >>
  5. What is the difference between tangible and intangible assets?

    Discover the difference between tangible assets and intangible assets and the types of assets that are in each. Additionally, ... Read Answer >>
  6. What is an aggregate limit and what type of insurance is it usually associated with?

    Understand why tangible assets are important to a company. Learn why the ownership of a tangible asset has benefits as well ... Read Answer >>
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