acquisition

1. The purchase of an asset, service, or legal right. 2. The purchase of an organization, or the obtaining of operational or legal control of an organization. In contrast to the generally voluntary nature of *mergers, acquisitions are often made against the wishes of the *management of the acquired organization. Under most forms of *Generally Accepted Accounting Principles (GAAP), the accounting treatment of corporate acquisitions normally gives rise to *goodwill, which is the difference between the *consideration paid by the acquiring company and the *fair value of the net assets acquired. Acquired entities are *consolidated into the group *financial statements of the *parent organization. Most forms of GAAP tend to strictly differentiate between mergers and *acquisitions, owing to the vastly different accounting treatment for both categories of *business combination. In most jurisdictions, large corporate acquisitions that concentrate market power and reduce *competition are frequently reviewed by regulatory authorities. Further reading: Davison (2001); Selim et al. (2002)