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.

  1. Net Tangible Assets

    Calculated as the total assets of a company, minus any intangible ...
  2. Acquisition Premium

    An acquisition premium is the difference between the estimated ...
  3. Tangible Asset

    A tangible asset is an asset that has a physical form, and includes ...
  4. Tangible Net Worth

    A measure of the physical worth of a company, which does not ...
  5. Goodwill

    Goodwill is an intangible asset that arises as a result of the ...
  6. Tangible Cost

    A quantifiable cost related to an identifiable source or asset. ...
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