Introduction
At the end of 2024, Paramount Global carried $10.5 billion of goodwill on its balance sheet, the residue of decades of media deals. Seven months later, after the Ellison family took control of the company by buying its controlling shareholder and combining it with Skydance, its accounts showed goodwill of about $1.4 billion and intangible assets of $6.7 billion, almost three times the previous amount. The business had not changed. Its accounting basis had: Paramount Skydance applied pushdown accounting, carrying the fair values implied by the new owners' purchase into the company's own financial statements.
What Pushdown Does
Normally, an acquisition changes the buyer's consolidated accounts and leaves the target's own books untouched. The target keeps its historical carrying amounts, and the fair value adjustments, goodwill and intangibles exist only in the parent's consolidation, as described in purchase price allocation. Pushdown accounting moves those adjustments into the acquired company's separate statements. Its assets and liabilities are restated to their acquisition-date fair values, goodwill is recorded at the acquiree level and its equity is reset to reflect the new basis, with its accumulated retained earnings eliminated.
- Pushdown accounting
The use of the acquirer's new basis of accounting, established when it obtains control, in the separate financial statements of the acquired entity. Under Accounting Standards Codification (ASC) 805-50, as amended by Accounting Standards Update (ASU) 2014-17, an acquiree may elect to apply it each time another party obtains control of it, and the election is irrevocable once made for that change in control.
Since 2014, pushdown has been optional. Before then, guidance from the staff of the Securities and Exchange Commission (SEC) applied only to SEC registrants: it required pushdown for subsidiaries that became substantially wholly owned (95% or more), permitted it between 80% and 95% and prohibited it below 80%. The Financial Accounting Standards Board (FASB) replaced those bright lines with an election available to any acquiree, public or private, after a change-in-control event, as Deloitte's roadmap on the option to apply pushdown accounting explains. The acquiree can elect it in the period of the acquisition or later, as a change in accounting principle.
Two limits apply. Debt the acquirer raised to buy the company is recorded in the acquiree's statements only if the acquiree is itself obligated for it. And if the purchase was a bargain, the acquiree does not report a gain in its income statement; the excess goes to additional paid-in capital.
Paramount's New Basis
Paramount's pushdown did not come from the election alone. The Ellison family controlled both Paramount Global and Skydance when the two became subsidiaries of Paramount Skydance, so the combination was accounted for as a common-control transaction, and under the common-control guidance in ASC 805-50 the combined company carries the net assets at the ultimate parent's basis: for Paramount Global, its fair value on August 7, 2025, the date the family obtained control. The annual report sets out that basis:
| Line item | Amount |
|---|---|
| Goodwill | 1,377 |
| Intangible assets | 6,737 |
| Programming and other inventory | 15,138 |
| Cash, receivables, property and other assets | 18,345 |
| Total assets | 41,597 |
| Long-term debt | (13,619) |
| Other liabilities | (15,132) |
| Noncontrolling interests | (1,151) |
| Paramount Global basis | 11,695 |
Source: Paramount Skydance 2025 Form 10-K, Note 2, after measurement period adjustments. At December 31, 2024, Paramount Global had reported goodwill of 10,508 and intangible assets of 2,406.
The new basis included $1.5 billion of trade names and $1.0 billion of affiliate relationships, a net reduction of $562 million in the value of programming assets and $1.4 billion of fair value for contingent liabilities, mainly asbestos and environmental claims from former businesses. With a new basis of about $11.7 billion, well below the $16.4 billion of stockholders' equity on Paramount Global's books the day before closing, the historical goodwill was eliminated and only $1.4 billion of new goodwill remained as the residual. The pushdown also eliminated $7.4 billion of retained earnings and a $1.5 billion accumulated other comprehensive loss, leaving Paramount Global's equity entirely in paid-in capital at the new basis.
Predecessor and Successor Periods
A company that applies pushdown presents its history in two parts: the predecessor periods before the change in control, on the old basis, and the successor periods after it, on the new basis, separated in the statements by a line to signal that they are not comparable. Paramount Skydance's 2025 income statement covers January 1 to August 6 as predecessor and August 7 to December 31 as successor. The successor results include amortization of the new intangible assets, lower programming costs from the reduced programming values and higher interest expense from remeasuring debt to fair value, as described in its 2025 annual report.
Pushdown is most common where the acquired company keeps reporting on its own: a subsidiary with public bonds outstanding, a regulated bank or insurer, or a sponsor-owned business that expects to return to the public markets, where the successor statements match the values its owner uses. For bankers, the main consequences are the break in comparability and the reset of the balance sheet: a company after pushdown can show a very different goodwill balance, higher amortization and lower earnings than before, with no change in its operations, the same effects explained in the acquisition method.
