* The parent's purchase of an acquiree constitutes an exchange transaction that justifies a new basis of accountability for the acquiree.
* The price paid by the new owners when there is a substantial change in ownership is the most relevant basis for measuring assets, liabilities, and results of operations of the acquiree from its owners' perspective.
* Because GAAP requires consolidated financial statements to reflect the fair value of an acquiree's identifiable assets and liabilities at acquisition, separately issued financial statements should also reflect this fair value to be symmetrical with the consolidated statements.
* By reporting net assets at the same amounts in the acquiree's separate financial statements and the consolidated financial statements, at least at acquisition, users of the acquiree's financial statements can readily assess the financial impact of an acquiree on the consolidated entity.
The acquirer shall identify the acquisition date, which is the date on which it obtains control of the acquiree.
The date on which the acquirer obtains control of the acquiree generally is the date on which the acquirer legally transfers the consideration (if any), acquires the assets, and assumes the liabilities of the acquiree--the closing date.
As of the acquisition date, the acquirer shall recognize, separately from goodwill, the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. Recognition of identifiable assets acquired and liabilities assumed is subject to the conditions specified in paragraphs 28 and 29.
For example, costs the acquirer expects but is not obligated to incur in the future to effect its plan to exit an activity of an acquiree or to terminate the employment of or relocate an acquiree's employees are not liabilities at the acquisition date.
Hence, it may be argued that inexperienced non-US acquirers will tend to view the US acquirees' TMT as a valuable resource worth retaining.
Firms that enter new product-markets through acquisition would not possess the managerial talent or know-how to replace acquirees' TMT, and therefore, would be more likely to retain them (Pitts 1976).
We did not include hostile acquisitions in our sample, as the resulting turnover would tend to reflect "the hostility of the takeover" and overwhelm any resource value that the acquirees' TMT could represent to the acquirer.
The dependent variable, TMT Turnover, was computed cumulatively as that proportion of the TMT that had exited (excluding retirement) from the "post-acquisition entity," thus excluding members of acquirees' TMT who had moved elsewhere within the acquirers' organization (Walsh 1988).
Such an impact can be reached through pure size effects due to the integration of acquirer and acquiree, e.g.
In the 'turn-around' cases typical of acquisitions in eastern Europe, it can well be argued that learning is the central aspect rather than integration: at least in the initial phases of east-west post-acquisition management it may well be more important to transform the east European acquiree than to integrate it into its new western parent organization.
While these individuals from both sides can represent all types of organizational roles and hierarchical levels, the focus of this paper is on learning by senior managers in key positions: western expatriate managers or so-called 'fly-ins' (supervising or managing the acquiree from their home office) as well as top central east European managers in the acquired company.