Push down accounting is a way of accounting for an acquisition, where the assets and liabilities of the acquired company are written at their purchase price rather than their historical cost. The process of push down accounting involves a write-up or write-down of the target company's assets and liabilities on the acquirer's balance sheet, reflecting the purchase price paid.

Any difference between the purchase price and the historical cost of the acquired company's assets and liabilities is "pushed down" to the acquirer's income statement along with the acquired company's net income and dividends. This method gives the acquirer a more accurate view of the economic impact of the acquisition. The net effect of push down accounting is that the acquirer restates the target company's financials as of the acquisition date, which more precisely reflects the true economic value of the acquisition.

One advantage of this approach is that the acquired company can immediately appear on the acquirer's balance sheet and income statement, showing the impact of the acquisition on the overall financial performance of the company. It also allows the acquirer to easily see the changes in value that have occurred since the acquisition date. However, a downside of this approach is that the picture of financial performance presented in the financial statements may not accurately reflect the historic picture of the acquired company's financial performance.

Overall, push down accounting can be a helpful tool for companies looking to gain a clearer understanding of the financial impact of an acquisition. It allows the acquirer to quickly understand the financial impact of the acquisition, while also providing the accurate accounting of the assets and liabilities acquired. While the historical performance of the acquired company may be distorted, this can be avoided if the acquirer studies the financial statements of the target company prior to the acquisition.