In a Takeover Where Consideration Is Provided in the Form

question 38

True/False

In a takeover where consideration is provided in the form of shares,shareholders in the target company are able to defer a potential capital gains tax liability until the shares in the acquiring company they accepted as consideration are sold.

---

Definitions:

Worksheet

A worksheet is often a piece of paper or a digital document used by accountants to prepare adjustments and end-of-period financial statements.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period of time, leading to its net income or loss.

Statement of Owner's Equity

A financial document showing the changes in the equity of a company over a specified period, including additions through earnings and subtractions due to withdrawals.

Debits

These represent transactions that increase assets or expenses or decrease liabilities, equity, or revenue in a company's accounts.