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Topic: Pooling of interests

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	Pooling - Wikipedia, the free encyclopedia
		Pooling-of-interests is a merger-accounting method that was taken out of the market in the United States by the Financial Accounting Standards Board on June 30, 2001.
		Pooling refers to the collection of multiple samples to represent one sample of weighted value.
		Pooling is the process of grouping together loans.
	en.wikipedia.org /wiki/Pooling (98 words)

	Pooling of Interests: Alterations of Equity Interests (47c) and Asset Dispositions (48c) (Site not responding. Last check: 2007-10-20)
		Alterations of Equity Interests Paragraph 47(c) of APB 16 prohibits a combining company from altering the equity interests of its shareholders "in contemplation" of effecting the proposed business combination to be accounted for as a pooling of interests.
		In general, the nearer the date at which the alteration of equity interests occurs to the initiation and consummation of a merger, the more sufficient, persuasive, and objectively verifiable the evidence must be.
		The determination of whether the presumption that a transaction involving a company's equity interests was undertaken "in contemplation" has been overcome or that a disposal of assets "was planned or intended as part of the combination" involves a careful analysis of the surrounding facts and circumstances.
	www.aicpa.org /belt/intpool.htm (4506 words)

	[No title]
		A }{\b\cf1 combinee}{\cf1 is a company that is a party to a business combination that qualifies for pooling of interests accounting treatment and whose stockholders surrender at least 90 percent of their outstanding common shares in exchange for the common shares of the combinor.
		When pooling accounting is used, the combinor normally issues its previously unissued common stock (treasury shares of common stock may be used under very limited circumstances, as discussed later) for the outstanding common shares of the combinee.
		Proponents of pooling maintain that: \par }\pard\plain \s31\qj\fi-540\li540\widctlpar\tx540\tx720\tx900\adjustright \f4\cf2 {\cf1 1.\tab A pooling of interests is a transaction taking place between the stockholder groups of the parties to the combination.
	lsb.scu.edu /~jsepe/consol-1.doc (4085 words)

	[No title] (Site not responding. Last check: 2007-10-20)
		The Pooling of Interest method of Accounting is based on the assumption that the transaction is merely an agreement between stockholder groups to exchange equity securities.
		The rational behind the pooling of interests method is that instead of an acquisition of one company by another, a pooling of interests reflects the merging of two stockholder groups that share in future risks and opportunities.
		Pooling of Interests accounting is based on the assumption that the combination is a uniting of ownership interests achieved by means of exchange of equity securities.
	andromeda.rutgers.edu /~efkiss/Pool-Purchase.doc (981 words)

	'Pooling' rule may stall mergers
		On the other hand, pooling is most often used in deals of the magnitude of Firstar's purchase of Mercantile Bancorporation Inc. because the negative impact on the acquiring bank's financial data gets bigger as the size of the deal and the takeover premium grow.
		Purchase accounting, on the other hand, requires that the difference between the net asset value of the seller and the price paid by the acquiring company be treated as "goodwill" and taken as an expense against earnings for up to 40 years (25 years in the case of banks).
		Evidence indicates that because of pooling accounting, reported ROE for financial institutions has been artificially high since 1992, with as much as six percentage points added to the number institutions would be reporting without it.
	www.jsonline.com /bym/news/apr99/990523poolingrulemaystallme.asp?format=print (1505 words)

	Purchase vs. Pooling Of Interests (Site not responding. Last check: 2007-10-20)
		In the pooling of interests method of accounting (assuming a 100% stock transaction), the balance sheets of the two parties are simply combined and common stock increases by the amount of shares of issued to the seller during the transaction.
		The pooling method permits the management of the acquirer to take credit for the operating results of the acquired company for the period prior to its acquisition.
		In addition, the pooling method suppresses the true cost of the acquisition because it carries forward historical costs and no recognition is given to the fair market value of the assets of the seller or to the fair market value of any securities used to pay for the acquired company.
	www.bizval.com /publications/articlelibrary/PurchasePoolingInterests.htm (943 words)

	Updata Capital - In the News (Site not responding. Last check: 2007-10-20)
		Pooling of interests combined the balance sheets of the two companies involved in a transaction at book value and recognized no change in asset values relative to the consideration (mostly or all stock) paid to consummate the deal.
		False: While pooling was the preferred method for merging and acquiring technology companies in the late 1990’s and 2000, it also hampered many companies in their ability to manage their capital structure and do deals.
		Pooling of interests was attractive because it avoided goodwill amortization costs and many large organizations were comfortable in this world.
	www.updata.com /uci/news/news2.htm (1052 words)

	805 KAR 1:100. Commission's rules of procedure; spacing of deep well drilling; wildcat wells and pooling of interests.
		If a deep well encounters a formation or pool as to which it is not a wildcat well, it may not be produced unless it is otherwise in compliance with the permit requirements and spacing regulations for other wells in that formation or pool.
		The first proposed unit for a pool shall be delineated so that the line forming one (1) side of the square is a base line running from south to north parallel to the Kentucky Coordinate System.
		A request to pool separately owned tracts concurrently with the establishment of a unit or units must be submitted with the application for the hearing, or sufficiently in advance to include notice of the request in the notices of hearing.
	www.lrc.state.ky.us /kar/805/001/100.htm (3258 words)

	Document Listing (Site not responding. Last check: 2007-10-20)
		Pooling accounting does require that the acquisition be made by issuing common stock and this means more shares of stock outstanding with all of its potential dilutive effects on earnings per common share.
		He calls for the abandonment of pooling as an acceptable method of accounting with the important proviso that goodwill created under the purchase method of accounting does not have to be amortized against earnings as long as the acquired company continues to be worth a premium.
		Given the higher earnings that would normally be reported under pooling accounting, the major reason for this lack of popularity has been the potential dilution of earnings due to the increase in the number of common shares outstanding needed to effect the business combination.
	www.fsu.edu /~accdept/Pooling-going-going-gone.html (2325 words)

	27-505 - Pooling of interests
		If the persons do not agree to pool their interests, the commissioner may, for prevention of waste, for protection of correlative rights, or to avoid drilling of unnecessary wells, enter an order pooling and integrating their interests for the development of their lands as a drilling unit.
		Orders effectuating such pooling shall be made after notice and hearing, and shall be upon terms and conditions which will afford the owner of each tract the opportunity to recover or receive his just and equitable share of the oil and gas in the pool without unnecessary expense.
		If such pooling is effectuated, the cost of development and operation of the pooled unit chargeable by the operator to other interested owners shall be limited to the actual and reasonable expenditures required for that purpose, including a reasonable charge for supervision.
	www.azleg.state.az.us /ars/27/00505.htm (424 words)

	[No title] (Site not responding. Last check: 2007-10-20)
		Consistent with comments made in our earlier letters, we continue to be concerned with the Board’s decision to approach this comprehensive project in stages, and would have preferred it to be conducted as a single project rather than several successive ones that discuss different but related issues.
		In discussing the portions of APB 16 that would presently be carried forward, the Exposure Draft indicates that “the Board does not necessarily agree with all of that guidance.
		We are concerned that in the Board’s haste to eliminate pooling accounting, it has taken a piecemeal approach to what should be a far more comprehensive model.
	www.fei.org /download/BizComCLfinal.doc (2468 words)

	"Pooling of interests" Definition
		The merging entities financial results are combined as though the two entities have always been a single entity.
		Pooling of interests - An accounting method for reporting acquisitions accomplished through the use of equity.
		Pooling of interests : an accounting method for reporting acquisitions accomplished through the use of equity.
	www.level2.ru /dictionary/p/pooling_of_interests.html (172 words)

	Farewell to Pooling (Site not responding. Last check: 2007-10-20)
		After several false starts and much lobbying by the US technology sector, this month sees the end of the "pooling of interest" accounting treatment that was so close to the hearts of many US technology companies in the 80's and 90's.
		Pooling of interests was a form of merger accounting which allowed the "merging" companies not to treat the goodwill of the acquired business, (i.e.
		The reason for this is, that in order to achieve pooling, the parties had to adhere to a number of guidelines set down by the FASB both in literal meaning and in spirit (much like the UK's Takeover Code).
	www.osborneclarke.com /publications/text/pooling.htm (1051 words)

	Death to "pooling of interests"? \| CNET News.com
		Yahoo already are showing some trepidation in doing deals unless they qualify for a pooling of interest accounting method.
		Pooling of interest basically allows companies to combine their operations in a merger and avoid taking a hit to their earnings over a period of time by avoiding the use of "goodwill."
		The pooling of interest practice is expected to be terminated by the end of next year, Petrone said.
	news.com.com /Death+to+pooling+of+interests/2100-1023_3-224764.html (977 words)

	Penn State Smeal: News - October 2000 (Site not responding. Last check: 2007-10-20)
		Pooling of interests, on the other, records the acquired firm's assets and liabilities at the book values and does not record goodwill.
		Pooling of interests at best helps the suppliers of the financial statements, i.e., the managers, explains Ketz.
		Pooling sweeps these costs under the rug; the purchase method discloses these costs clearly and accurately.
	www.smeal.psu.edu /news/releases/oct00/fasb.html (848 words)

	Conservation Order No. 254
		No testimony was offered by persons owning mineral interests in tracts of land within the proposed drilling unit that opposed the voluntary development of an agreement to pool their interests within the proposed 640 acre drilling unit.
		Persons holding interests in the proposed 640 acre drilling unit have been invited by a James A White representing the Peninsula Pipeline Company to establish a fair and equitable agreement for pooling their interests within the boundary of the drilling unit.
		Development by the commission of an order to involuntarily pool the interests of tract mineral owners within the proposed Mike Pelch #1 drilling unit is not ripe at this time for commission action under AS 31.05.100(c).
	www.state.ak.us /local/akpages/ADMIN/ogc/orders/co/co001_299/co254.htm (917 words)

	Healthcare Mergers, Acquisitions, and Collaborations
		The pooling of interests method accounts for a business combination as the uniting of ownership interests of two or more entities by exchange of equity securities.
		Therefore, not-for-profit organizations are, under certain circumstances, permitted to report by the pooling of interests method, even though they generally do not issue common stock.
		Under the pooling of interests method, there is no step-up in basis of the assets and liabilities of the combining entities.
	www.hfma.org /resource/P_and_P_Board/statement_20.htm (3904 words)

	TheStreet.com: FASB Pulls Plug on Pooling-of-Interests Accounting
		When companies account for a transaction through a pooling of interest, they can simply combine their financial results as if they had always been one unit.
		Arguing forcefully for preserving pooling of interests, Sevin Rosen Funds -- where Compaq ( CPQ :NYSE) Chairman Ben Rosen is a founding partner -- urged the FASB not to pursue "the risky and potentially economically disruptive path" of eliminating pooling-of-interest accounting.
		Though pooling of interest has been used a lot among high-tech companies, at least one of the letters reminded the board that this issue touches other companies too.
	www.thestreet.com /pf/tech/internet/738467.html (908 words)

	Pooling Mergers: Graziadio Business Report
		This issue is whether or not pooling of interests accounting should be allowed, and it is creating a firestorm in the merger and acquisition arena arena.
		A conservative estimate is that AT&T paid $50 million to be able to pool but, depending on how stock price changes during the negotiation period are interpreted, the additional cost may have been as high as $500 million for a merger that was ultimately disastrous.
		Two additional academic studies examined large samples of pooling method mergers and found that, in general, not only does the likelihood of using the pooling method increase with the size of the potential goodwill to be recorded, but the premiums paid for similar sized target firms are higher if the pooling method is used.
	gbr.pepperdine.edu /003/pooling.html (1856 words)

	Brown & Brown 2001 Annual Report (Site not responding. Last check: 2007-10-20)
		Since 1993, excluding the historical impact of poolings, our pre-tax margins improved in all but one year, and in that year, the pre-tax margin was essentially flat.
		Interest expense increased $4.4 million, or 350%, in 2001, and decreased $0.1 million, or 7%, in 2000.
		Effective January 2, 2002, we entered into an interest rate swap agreement to lock in an effective fixed interest rate of 4.53% for the remaining six years of the term loan, excluding our “credit risk spread” (additional interest paid to offset risk of default) between 0.5% and 1.0%.
	www.brown-n-brown.com /pages/annual2001/pages/financials/mda.html (3854 words)

	MSN Tech & Gadgets (Site not responding. Last check: 2007-10-20)
		Internet companies such as portal giant Yahoo already are showing some trepidation in doing deals unless they qualify for a pooling of interest accounting method.
		For its part, Yahoo noted in a regulatory filing that "the availability of [the pooling of interest]; accounting treatment is a condition to the merger" with community site GeoCities.
		Amy Callahan, vice president of the Western region for the Information Technology Training Association, said her trade group is concerned that these changes to the use of pooling will stunt the growth of the U.S. tech industry.
	msn-cnet.com.com /2100-1023_3-224764.html (939 words)

	ACC452 Chapter 2 (Site not responding. Last check: 2007-10-20)
		If the parent company acquires a controlling interest in a subsidiary and subsequently mandates dissolution of the sub, the resultant accounting analysis is the same as that for a net asset acquisition ( stock acquisition + dissolution = statutory merger/consolidation).
		Superimposed upon the distinction between net asset acquisition and stock acquisition is the determination of whether the fact pattern meets the criteria for pooling of interests accounting treatment.
		In a combination crafted as a pooling of interests, all acquisition costs were expensed.
	www.mscd.edu /~acc/acc452/452ch2.html (1635 words)

	Pooling of Interests (Site not responding. Last check: 2007-10-20)
		Companies, especially financial firms and those in the high technology and pharmaceutical industries, often chose pooling as their way of avoiding the long-term earnings dilution from the amortization of goodwill against earnings.
		The elimination of pooling has been muted to a large degree because of the new rules for treating acquired goodwill and intangibles in a purchase acquisition.
		Instead of the old approach of amortization of goodwill for up to 40 years, companies now must subject the acquired goodwill to a complex annual “impairment test” aimed at determining whether there has been a decline in the value of that goodwill.
	www.bwl.com /poolingnews.htm (363 words)

	Journal of Accountancy: Everyone out of the pool - pooling-of-interests accounting (Site not responding. Last check: 2007-10-20)
		That these companies will not structure the deal as a pooling is surprising to many observers, since the transaction will require the new company to recognize goodwill totaling about $150 billion.
		Deals of this size frequently are accounted for as poolings and often are contingent on the acquirer receiving pooling accounting treatment.
		Under the pooling method, the parent company obtains a controlling interest in the stock of the target company by exchanging shares of stock without making significant cash disbursements.
	www.findarticles.com /p/articles/mi_m6280/is_5_189/ai_62259881 (1446 words)

	BUSINESS COMBINATIONS:
		Prior to SFAS No. 141, a business combination was classified as either a purchase or as a pooling of interests.
		APB Opinion No. 16 describes the twelve criteria that must be met in order for a business combination to be classified as a pooling of interests.
		If all the criteria in 'APB Opinion No. 16' are satisfied the business combination should be recorded as a pooling of interests, and this will be indicated to you.
	acct.tamu.edu /smith/purpool/apb16_1.htm (383 words)

	Pooling your interests (Site not responding. Last check: 2007-10-20)
		Many of these companies have not been around long enough to be subject to a standard long term analysis, and the larger, older and more successful ones have so far developed to classical pharmaceuticals corporations (Genentec, Amgen) with an added twist and meanwhile the grand old pharmaceuticals have caught up with their genetic research.
		There seems to be a solution to this problem: pooling resources and diversifying, thereby minimizing risk.
		There is another solution though, which is, direct participation in pooled resources at the corporate level.
	www.karnerconsult.com /ideas_31.htm (756 words)

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