Posted by & filed under Accounting Principles, Advanced Accounting.

Description: The Covid crisis has been good for business at PayPal as consumers have used the online payments firm to process transactions during the boom in e-commerce during the lockdowns. Now comes word that the payments processor has an interest in Pinterest in a bid to enter the social media space. PayPal’s offer of $45 billion is priced at a premium of over 25% of Pinterest’s current valuation.

Date:  October 20, 2021



Discussion points:

1) Have you used either Paypal or Pinterest? How about your classmates?

2) How does Pinterest generate its revenue?

3) Illustration 12-4 in Wiley’s Financial Accounting: Tools for Business Decision-Making discusses three accounting guidelines for strategic investments. Which scenario do you think Paypal would find applicable to the acquisition of Pinterest?

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