FAS 141R: The End of Pooling-of-Interests in Mergers

By: Dennis Gardiner, Partner email

Effective January 1, 2009 mergers of credit unions will be accounted under the “Acquisition Method” of accounting.    Each merger will require an acquirer to be identified.  Further, the acquirer is required to recognize the assets acquired and the liabilities assumed to be measured at their fair values as of the date the acquirer achieves control. This Statement is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects.  The Statement establishes principles and requirements for how the acquirer: 1. Recognizes and measures:
  • The identifiable assets acquired and the liabilities assumed
  • The goodwill acquired in the business combination or a gain from a bargain purchase
2. Determines what information to disclose Be sure to contact us as before you consider a future business combination to understand the accounting and reporting requirements