An acquisition is a significant event in the financial and strategic operations of a business where one company acquires another business or its assets. The acquiring company may do this to expand its operations, add to its product or service offerings, enter new markets, or gain a competitive advantage. This process often involves a legal and financial evaluation to determine the terms of the acquisition.

For example, when Company A acquires Company B, it may gain the latter's tangible assets such as property and equipment, intangible assets like patents and goodwill, or the overall business operation. Acquisitions can occur through purchasing shares, merging entities, or specific asset acquisitions.

In accounting terms, the acquired entity's finances must be properly recorded, which might include valuations for goodwill or addressing pre-existing debt obligations of the acquired company. This requires a systematic approach, aligning with accrual accounting methods and potentially affecting balance sheet presentations and other financial reconciliations. Accountants often use tools like balance sheet reconciliations or journal entries to correctly record these complex transactions.