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Goodwill is the excess of the purchase price over the fair value of the identifiable net assets acquired. It represents intangibles like brand reputation and customer relationships. Accounting Impact: Goodwill is recorded as an intangible asset on the balance sheet and is tested annually for impairment.

PPA is the process of assigning the fair value to the assets and liabilities of an acquired company. Accounting Impact: This process affects the balance sheet by establishing the new book values and any resulting goodwill or bargain purchase.

Pooling of interests is an accounting method used for mergers where the assets and liabilities of the merging companies are combined at historical cost, not current market value. Accounting Impact: This method is no longer allowed under GAAP; all business combinations are accounted for by the acquisition method now.

The acquisition method is used for accounting in business combinations where one entity is identified as the acquirer. Accounting Impact: The acquirer recognizes assets and liabilities at their fair values and any non-controlling interest. Goodwill or a gain from a bargain purchase may also arise.

Bargain purchase occurs when the acquisition price is less than the fair value of the identifiable net assets. Accounting Impact: A gain is recognized on the acquirer's income statement, and assets and liabilities are written up to fair value.

An earnout is a contingent payment in an acquisition, which is based on the future performance of the acquired company. Accounting Impact: The potential earnout is recognized as a liability at fair value and is remeasured at each reporting date, with changes recognized in the income statement.

Non-controlling interest represents the portion of equity in a subsidiary not attributable to the parent company. Accounting Impact: Non-controlling interest is presented as a separate component of equity in the consolidated balance sheet, and its share of earnings is recognized in the consolidated income statement.

Contingent consideration is an obligation to transfer assets or equity if certain conditions are met after a merger or acquisition. Accounting Impact: Recognized as a liability or equity at fair value at the acquisition date. Subsequent changes in the liability are typically recognized in earnings.

Synergies refer to the potential financial benefit that is expected from the integration of the acquirer and target companies. Accounting Impact: Synergies themselves are not recorded on financial statements, but their effect on valuations may influence the amount of goodwill recognized.

Intangible assets are non-physical assets such as patents, trademarks, and technology licenses that a company obtains through an acquisition. Accounting Impact: Intangible assets are recorded at fair value on the balance sheet and are, with certain exceptions, amortized over their useful lives with the expense affecting the income statement.

Pro forma financials are adjusted financial statements showing what a company's performance might have looked like if the acquisition had occurred at an earlier date. Accounting Impact: Provide information about the historical performance and future prospects, and are often used to measure the impact of the acquisition on earnings.

Due diligence is the comprehensive appraisal of a business undertaken by a prospective buyer, particularly to establish its assets and liabilities. Accounting Impact: Due diligence findings may affect the purchase price, the amount of recognized goodwill, or the treatment of contingent liabilities.

Impairment test is the exercise of assessing whether the carrying value of an asset is higher than its recoverable amount. Accounting Impact: If impaired, the carrying value is written down to the recoverable amount with the impairment loss recognized in the income statement.

A reverse acquisition occurs when the entity that issues securities is identified as the acquiree rather than the legal acquirer. Accounting Impact: The accounting is similar to a traditional acquisition, but the legal acquiree prepares the financial statements as if it were the legal acquirer.

A step acquisition involves multiple transactions in which an acquirer obtains control over an acquiree over time. Accounting Impact: Each step is accounted for separately, with changes in ownership interest potentially resulting in remeasurement of previously held equity interest with the impact recognized in income.

Change in control refers to the transfer of control of a business where the acquirer obtains the power to direct the financial and operating policies. Accounting Impact: It results in consolidation of the acquiree's assets and liabilities at fair value and recognition of any non-controlling interests.

A carve-out occurs when a company sells a unit, division, or certain assets to another company. Accounting Impact: The seller recognizes a gain or loss on the sale depending on the carrying value and sales price, and removes the sold assets and liabilities from its balance sheet.

Gain on sale is realized when the proceeds from the sale of a subsidiary's shares or assets exceed their carrying amount. Accounting Impact: The gain is recognized in the income statement, which can improve profitability and other performance metrics.

Restructuring charges are expenses associated with reorganizing a company's operations, such as severance payments or costs of exiting leases. Accounting Impact: These charges are recognized on the income statement as incurred, which may reduce reported earnings in the period.