Explanation

The amount paid by the buyer of a business sold as a going concern is called purchase consideration. This is the total price paid to acquire a business that will continue operating, rather than being liquidated.

Purchase consideration can be paid in various forms: cash, shares in the acquiring company, debentures, or a combination of these. The exact mix depends on what the buyer and seller agree upon.

When a business is bought as a going concern, the buyer acquires all assets, takes over liabilities, and gains the benefit of the business’s reputation, customer base, and earning potential. This is different from buying individual assets at auction.

Conversion fees relate to changing one type of security into another. Consolidation fees are not a standard accounting term. Premium fees might relate to insurance or share premiums but not to business purchases.