Acquisition Purchase Accounting Entries is a financial reporting process that businesses use to document a purchase transaction of another company. This process requires the buyer to record the difference between the fair market value of the asset and its net carrying amount, which can be recorded as an increase or a decrease in equity. Through this process, buyers can properly account for any liabilities that may have been assumed from the acquired entity, and will provide accurate financial reporting for shareholders and other interested parties. Additionally, Acquisition Purchase Accounting Entries ensures that buyers are not overpaying for a certain target by providing them with necessary financial information about the target’s assets at the time of purchase.