An article appearing in Fortune (February 13, 1989) entitled “What Foreigners Will Buy Next” points out that foreign companies bidding to acquire U.S. companies often pay huge premiums over the market prices of the target companies’ outstanding stocks. Examples include Bridgestone’s (Japanese tiremaker) $80 per share bid to acquire Firestone, Campeau Corporation’s (former Canadian retail empire) purchase of Allied Stores, and Maxwell Publishing’s (British publication house) $90 per share bid for Macmillan Publishing. The arti¬ cle notes that “part of the reason foreign companies can afford to pay so much is that they live by different accounting rules.” REQUIRED: Identify the accounting rules referred to above, explain how the U.S. rules differ from those in other countries, and explain how these differences can enable foreign companies to outbid U.S. companies. Are the foreign companies necessarily better off because they chose to pay these premiums?