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Regardless of the method of acquisition; direct costs, costs of issuing securities and indirect costs are treated as follows: Treatment to the acquiring company: When purchasing the net assets the acquiring company records in its books the receipt of the net assets and the disbursement of cash, the creation of a liability or the issuance of stock as a form of payment for the transfer.
Treatment to the acquired company: The acquired company records in its books the elimination of its net assets and the receipt of cash, receivables or investment in the acquiring company (if what was received from the transfer included common stock from the purchasing company).
Accounting standards require items to be recorded in separate funds, but for reporting purposes, interfund activity is eliminated from government-wide financial statements.
Similarly, many state, provincial, and local governments present their budgets by fund.
In business, consolidation or amalgamation is the merger and acquisition of many smaller companies into much larger ones.
In the context of financial accounting, consolidation refers to the aggregation of financial statements of a group company as consolidated financial statements.In the Spending Round 2013, the Government announced its plans to ensure it continues to meet its fiscal targets and protect the economy and will reduce pending by around £11 billion in 2015-16.Since the Online System for Central Accounting and Reporting (OSCAR) was introduced in 2012, a system of Common Chart of Account Codes has been introduced.Upon consolidation, the original organizations cease to exist and are supplanted by a new entity.A parent company can acquire another company by purchasing its net assets or by purchasing a majority share of its common stock.However, there is little guidance on whether or how to eliminate double-counting from entity-wide consolidated budget totals.