In purchase accounting, a new basis of accounting is established for the target company's assets.

Name: In purchase accounting, a new basis of accounting is established for the target company's assets.
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In purchase accounting, which is used in business combinations, the acquiring company establishes a new basis of accounting for the assets and liabilities of the target company, often reflecting their fair values at the acquisition date.

In Purchase Accounting, a New Basis of Accounting Is Established