Technology company matchmakers in the future may pause to reminisce fondly about “pooling of interests,” a popular accounting method that has made many mergers substantially less expensive over the long haul. But its demise will not likely impact the technology industry’s rampant intermarriage.
As expected, the Federal Accounting Standards Board this week spiked the rule allowing companies to ignore so-called good will write-offs. The rule had become a preferred method for high-tech deals, since accounting for good will can create a significant drain on earnings, and by association, stock price. Such write-offs are normally required when the purchase price of a company exceeds its book value.
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