Question

Discuss 5 differences between merger accounting and acquisition accounting and the reasons why merger accounting is no longer in use.

Answer 1

Difference between merger and acquisition      

Merger	Acquisition
The merger means the fusion of two or more than two companies voluntarily to form a new company.	When one entity purchases the business of another entity, it is known as Acquisition.
Formation of new company.	Not a formation of new company.
The mutual decision of the companies going through mergers.	Friendly or hostile decision of acquiring and acquired companies.
the two companies dissolve to form a new enterprise.	the two companies do not lose their existence.
mergers are done to reduce operational costs, expand into new markets, boost revenue and profits. Mergers are usually voluntary and involve companies that are roughly the same size and scope.	An acquisition takes place when one company takes over all of the operational management decisions of another company.