When an acquiree is an operating segment, issuing separate financial statements on a basis other than pushdown will conflict with financial information about that segment provided by the diversified entity.
* Consistency and comparability are impaired for users of acquiree financial statements following pushdown accounting.
* Pushdown accounting may create problems for the acquiree in complying with existing agreements with outsider creditors and preferred stockholders that are based on financial statement amounts or ratios.
In addition, to qualify for recognition as part of applying the acquisition method, the identifiable assets acquired and liabilities assumed must be part of what the acquirer and the acquiree (or its former owners) exchanged (or what was contributed) in the acquisition transaction rather than the result of separate transactions.
The acquirer's application of the recognition principle and conditions may result in recognizing some assets and liabilities that the acquiree had not previously recognized as assets and liabilities in its financial statements.
The acquirer shall measure the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at their acquisition-date fair values.
This suggests that national difference between acquirer and acquiree exacerbates the general tendency towards turnover of acquirees' top managers and that non-US firms do not see incumbent US management as a resource worth retaining.
It would appear that in such instances cultural and national differences do not mitigate the perceived value of acquirees' US managers to inexperienced non-US acquirers.
Specifically, we found that if foreign acquirers perceive acquirees' TMT as a desirable non-duplicable resource, turnover will be much lower than even in domestic acquisitions, in spite of the implied cultural differences in international acquisitions.
Although this might be a generally appropriate conclusion, in the case of a western company making an acquisition in eastern Europe these restrictions should be eased for the acquiree, thus facilitating the occurrence of learning processes.
The 'experience' questionnaire: a three-page (plus cover) questionnaire with 11, mainly open, questions relating to the objectives and expectations of acquirer and acquiree, the (subjective) performance of the acquiree, a number of qualitative issues concerning its post-acquisition development, the acquirer - acquiree relationship, and individual as well as collective learning experiences.
The central east European managers involved were in most cases the most senior local managers in the acquiree organization, and often the former Presidents or CEOs of the acquired company before the transaction and subsequent reorganization.