Corporate America has now had nearly a full year to adjust to new rules that radically changed how mergers and acquisitions are accounted for. It’s been a bumpy ride, and at least some companies have found themselves stuck in valuation sinkholes.
The rules went into effect at the start of 2009 as Financial Accounting Standard No. 141(R), Business Combinations (subsequently housed in the new Accounting Standards Codification as Topic 805, Business Combinations), and require companies to use fair-value accounting to a much greater extent when valuing deals and the net assets required. That alone set some people to worrying that merger ...