WASHINGTON - Poised to eliminate pooling of interests for mergers, the Financial Accounting Standards Board is scheduled to release today a draft compromise it says would soften the blow of the imminent rule change.
The draft has been anticipated since the board, a private-sector body that sets accounting rules, voted in January to eliminate pooling. Instead, by midyear mergers would have to be recorded by the acquiring company as a purchase. The so-called purchase accounting method would require companies to recognize the difference between the price paid for an acquisition and the acquired firm's book value. That difference, known as goodwill, would have to be subtracted gradually from earnings over 40 years or less.