The acquisition method is an accounting approach used to record and report the financial effects of a business combination, where one company acquires another. This method requires the acquirer to recognize the assets acquired and liabilities assumed at their fair values as of the acquisition date, and any excess purchase price over the fair value of identifiable net assets is recorded as goodwill. This approach is crucial in understanding how mergers and acquisitions impact financial statements and the overall financial position of entities involved.
congrats on reading the definition of acquisition method. now let's actually learn it.