Purchase/Acquisition of a Business

What is the Purchase/Acquisition of a Business?

The Purchase/Acquisition of a Business represents the cash payment made to acquire businesses or subsidiaries for a certain period. There will be instances wherein the cash paid is different from the net asset value of the acquired business and will depend on both parties’ agreement.

It includes:

• Cash acquired in the acquisition (as a deduction);
• Goodwill resulting from the acquisition of subsidiaries;
• Capital expenditures resulting from the acquisition of subsidiaries;
• Discount on acquisition of subsidiaries; and
• Acquisition of minority interest (including those reported as Financing cash flows).