In accountancy, “how to calculate net assets at acquisition” refers to a set of procedures for determining the value of a business during the acquisition process. For instance, when Company A acquires Company B, net assets at acquisition is the difference between the acquired assets and liabilities at fair value.
Accurately calculating net assets at acquisition is crucial for ensuring a fair acquisition transaction, distributing acquisition costs appropriately, and facilitating future financial reporting. A key historical development in this area was the adoption of International Financial Reporting Standard (IFRS) 3 Business Combinations, which standardized net asset calculation methods.