Investopedia

Continue to Site »

Pooling Of Interests

Filed Under » , , , ,
Dictionary Says

Definition of 'Pooling Of Interests'

A method of accounting that allows the balance sheets of two companies to be added together during an acquisition or merger. Pooling of interests is one of the accounting methods that companies can choose to employ when combining assets. The alternative would be the purchase method in which the purchasing company adds the absorbed company's assets to its fair market value.
Investopedia Says

Investopedia explains 'Pooling Of Interests'

One of the important differences between the two methods is that pooling of interests allows for assets to be evaluated by book value rather than market value. This allows them the option to work without adding in goodwill, an intangible value that a business earns through reputational factors like customer relationships and brand recognition.

Articles Of Interest

  1.

    Reading The Balance Sheet

    Learn about the components of the statement of financial position and how they relate to each other.

  2. The Merger - What To Do When Companies Converge

    Learn how to invest in companies before, during and after they join together.

  3. Off-Balance-Sheet Entities: An Introduction

    The theory and practice of these entities varies greatly. Investors need to learn what they're getting into.

  4. Mergers And Acquisitions: Understanding Takeovers

    In the dramatic world of M&As, battleground terms meld with bizarre metaphors to form the language of the game.

  5. Mergers & Acquisitions: An Avenue For Profitable Trades

    When major corporate transactions have a big impact on the currency markets, you can benefit.

  6. Analyzing An Acquisition Announcement

    These deals can make or break investors' returns. Find out how to tell the difference.

  7. Mergers Put Money In Shareholders' Pockets

    Learn the five ways mergers and acquisitions can increase a company's value.

  8. 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. In general, the acquiring company's stock will fall while the target ...

  9. What is the difference between a merger and a takeover?

    In a general sense, mergers and takeovers (or acquisitions) are very similar corporate actions - they combine two previously separate firms into a single legal entity. Significant operational ...

  10. Why do companies merge with or acquire other companies?

    Some of the reasons for mergers and acquisitions (M&A) include:1. Synergy: The most used word in M&A is synergy, which is the idea that by combining business activities, performance will ...
comments powered by Disqus
Marketplace
Hot Definitions

  1. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  2. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  3. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  4. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  5. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  6. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
Trading Center