Acquiree is the term used to call the subject matter of sale that is being sold. For example if a company is being traded or sold the subject matter of the sale means all that is part of the sale. It can also be called the ‘target firm’ which is being acquired or purchased.
Acquiree must be separated from the term career in the sense that the buyer of the firm is the acquirer, and the firm that has been bought is the acquiree. The acquirer gains control of the combining entity or the business sold. The acquirer may receive from the acquiree the entire entity, one or more segments of the entity, or one or more cash generating units of the entity or shares in the entity.
Usually a trend is seen in the share price of an acquiree due to uncertainty in the future of the business entity. This trend can be positive or negative however, eventually if the acquirer is good enough, an upward trend becomes visible. For example if the acquiree share price was $20 per share at the time when it was acquired by the acquirer the price may fall to $12 per share. This trend is normal as it depends on the uncertainty that the stock holders face due to the new management of the acquiree.
The trend of the share price is also managed with the way the financial statements are measured and disclosed to its users. The IFRS is very strict and clear about the disclosure of acquiree in the reporting so that the stockholders regain their confidence in the entity. The principles IFRS has set for the acquirees are based on the rules that the acquirer has to follow. The basic aim of IFRS is to improve the relevance, reliability and comparability of the business combination, and to disclose the position of acquiree in the reporting of the financial statements. It is must that the financial statements must be comprised of the identifiable assets acquired, the liabilities assumed and the non controlling interest in the acquiree. It is also important that the financial statements must disclose all information about acquiree and its effects to the users of these statements.