Pullup accounting does not exist but pushdown accounting does. It is so specialised that many accountants have never heard of it. Pushdown accounting cannot be understood without stepped-up accounting and spin offs. Push, step and spin. But not necessarily in that order. Further, pushdown accounting is a decision which when taken becomes irrevocable. So when you push, step and spin make sure you don’t ever want to push back, step back or reverse the spin.
To make it more bewildering, pushdown accounting is acceptable under U.S. GAAP, as a convention which can be applied in business combinations, but is not recognized by International Financial Reporting Standards (IFRS).
I cannot remember where I found this explanation, and after another search I still can’t find it, so my apologies for not recognising the person who wrote it. It explains the two terms in such a vivid manner:
“… to illustrate the different options let’s consider that the business combination is a simple dinner party at home. Pushdown accounting would require a complete redecorating of the house. To implement stepped-up accounting, the hosts would have to purchase new cutlery, an expensive tablecloth and a few dinnerplates for the same party but leave the house alone. The house and its contents stay unchanged with historical accounting and nothing is bought or changed for the party except the purchase of the food and drink.”
Pushdown accounting is a convention which can be applied in business combinations under U.S. GAAP where the acquired company may elect pushdown accounting, by adopting fair value stepped-up values into its own financial statements instead of continuing with historical accounting.
But the important accounting principle remains clear: before one can pushdown, one must first step-up. And never step-down or pull up.