urchase Method Accounting
urchase accounting requires the acquirer torecord in its financial statements the fair marketvalue of all assets acquired.
±Both tangible and intangible, and liabilities assumed. ±The fair value of an asset is generally its market or appraised value, and liabilities are generally valuedon a present value basis.
Any excess or residual purchase price over thefair value of the net identifiable assets isconsidered goodwill that must be recorded as anasset and amortized over its useful life or amaximum of 40 years.