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Strategies & Market Trends : Value Investing
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To: rjm2 who wrote (17475)7/30/2003 8:52:52 PM
From: quasimodo  Read Replies (1) of 79043
 
"With BONT paying $80 million, is it possible that you would have to write the PP&E and other assets down to ZERO at EBSC"

Under the purchase method, the excess of buying price over fair value of equity is recorded as goodwill. In this case there will be no goodwill. Under the pooling method, the companies will just combine their assets and liablities at historical cost without recording any goodwill.

"If so, would that mean that the $20 million in annual depreciation and amortization at EBSC would be eliminated?"

No. The depreciation and amortization accounts refer to the pp&e and the capitalized leases of EBSC and these will be consolidated into BONT's figures.

Hope that answers your questions.
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