Which of the following statements is FALSE?
A)The method of payment (cash or shares)affects how the value of the target's assets is recorded for tax purposes and it affects the combined firm's financial statements for financial reporting.
B)Any goodwill created in a merger deal can be amortised for tax purposes over 15 years.
C)The combined firm must mark-up the value assigned to the target's assets on the financial statements by allocating the purchase price to target assets according to their fair market value.
D)Many transactions are carried out as acquisitive reorganisations under the tax law. These structures allow the target shareholders to defer their tax liability on the part of the payment made in acquirer shares but they do not allow the acquirer to step up the book value of the target assets.

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements is FALSE?
A)The method of payment (cash or shares)affects how the value of the target's assets is recorded for tax purposes and it affects the combined firm's financial statements for financial reporting.
B)Any goodwill created in a merger deal can be amortised for tax purposes over 15 years.
C)The combined firm must mark-up the value assigned to the target's assets on the financial statements by allocating the purchase price to target assets according to their fair market value.
D)Many transactions are carried out as acquisitive reorganisations under the tax law. These structures allow the target shareholders to defer their tax liability on the part of the payment made in acquirer shares but they do not allow the acquirer to step up the book value of the target assets.

Which of the Following Statements Is FALSE