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TeachMeFinance.com - explain purchase accounting purchase accounting -- a method of accounting when one enterprise is acquired by another. The surviving enterprise records as its cost the market value of the acquired assets less liabilities assumed. The difference between that market value and the total price paid is recorded as an asset called goodwill. See goodwill. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.