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Statements APB Opinion No. 16, Business Combinations FASB Statement No. 141 (revised 2007), Business Combinations ISSUE

By Nullified Fas (r

Abstract

Issue No. 88-16, “Basis in Leveraged Buyout Transactions, ” addresses how to determine the basis of NEWCO’s investment in OLDCO in a transaction that takes the form of NEWCO’s 100 percent purchase business combination of OLDCO. That investment must be allocated to individual assets and liabilities of OLDCO in order to prepare NEWCO’s consolidated financial statements. The issue is how NEWCO’s investment in OLDCO should be allocated to individual assets and liabilities of OLDCO in LBO transactions within the scope of Issue 88-16 in which a portion of NEWCO’s investment in OLDCO is valued at predecessor basis. EITF DISCUSSION The Task Force reached a consensus that NEWCO’s basis in OLDCO should be allocated to individual assets and liabilities in a manner similar to a step acquisition (that is, the partial purchase method). [Note: This consensus has been nullified by Statement 141(R). Se

Year: 1990
OAI identifier: oai:CiteSeerX.psu:10.1.1.353.3240
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