PURCHASE METHOD Definition

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PURCHASE METHOD is accounting for an acquisition using market value for the consolidation of the two entities` net assets on the balance sheet. Generally, depreciation/amortization will increase for this method (due to the creation of goodwill) compared to the POOLING OF INTEREST METHOD resulting in lower net income.

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ORDINARY ASSET is a non-capital asset used for business purposes. See CAPITAL ASSET.

SAME STORE SALES is used when analyzing the retail industry. It compares sales in stores which have been open for a year or more.

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