Difference between net payment method and net assets method
Answers
In the net payment method all the payments made to the shareholders of the transferor company by the transferee company are added to calculate the purchase consideration.
The net asset method or adjusted net asset method is a business valuation procedure which is used in acquisition accounting. It changes the stated values of a company's assets and liabilities in order to reflect its current fair market values.
Under the net assets method the values of various assets are added and deducted from the values of various liabilities to calculate the purchase consideration. The values of these assets and liabilities are agreed upon by the purchasing company and the vendor company. They are not the values of these assets and liabilities which are entered in the vendor company's Balance Sheet.