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Chapter 1 — Overview of Accounting for Business Combinations

1.2 Pushdown Accounting

1.2 Pushdown Accounting

When an entity obtains control of a business, a new basis of accounting is established in the acquirer’s financial statements for the assets acquired and liabilities assumed. Sometimes the acquiree prepares separate financial statements after its acquisition. Use of the acquirer’s basis of accounting in the preparation of an acquiree’s separate financial statements is called “pushdown accounting.”