Accounting for Acquisitions in an Organization

Acquisition is defined as the process where the assets or stocks of a company are bought completely or partially by another company. Companies adopting growth strategies opt using acquisitions rather than expanding the existing structures. When a company is acquired, the acquiring company may pay the other company in cash or acquire the stock of the company or the two options can be combined. Companies may acquire other companies in a hostile or friendly manner. A friendly acquisition occurs when there is an agreement from the two companies. Hostile acquisitions happen when a company is forced to accept selling its assets or stocks to another company.