FSA: pooling method

when use pooling method, does both Asset and liability higher at historical cost ? so the equity is lower? Thanks.

yes, the two firms are combined as if they were always one; combined using historical book values. No write up to fair val. Also called “uniting-of-interests” method for obvious reasons.

When using pooling of interest, you’ll get the lowest equity compared to all Equity, Prop Cons, and Cons method. It is always based on historical values. (A and L at cost too) Hope this helps.

and no goodwill