When a business combines with or acquires another, it may combine with or acquire a complex set of tax attributes, assets and liabilities. Those tax characteristics are affected by a wide variety of transaction-oriented tax provisions. ASC 740 requires taxpayers and their accountants to take those provisions into account in preparing financial statements. With a substantial transaction advisory practice, TaxGroup is well qualified to understand and determine the tax accounting consequences of complex transactions.

Logo-Bullet Quantification And Resolution

The tax law does not make the same distinction between purchase accounting and business combination accounting as financial accounting does, but it includes a comparable distinction between taxable and tax-deferred transactions. In tax-deferred transactions many tax attributes are carried over, albeit subject to special limitations that require special analysis and handling. In taxable transactions, issues such as purchase price allocation can make a tremendous difference to the consequences of the transactions and to the parties’ ongoing tax health. Many of these areas can involve substantial uncertainties and call for the exercise of judgment. TaxGroup can turn those uncertainties and judgment calls into positions suitable for evaluation, resolution and quantification under ASC 740-10 (also known as Fin 48).

Logo-Bullet Addressing Broader Issues

Major business transactions also affect employment matters. The tax treatment of those matters bears only an incidental relationship to their financial accounting treatment, but that tax treatment must be factored into the taxpayer’s financial accounting. TaxGroup is highly experienced in handling employee compensation tax issues, including equity-based compensation, golden parachutes, Internal Revenue Code § 409A, etc., in major transactions.

Transactional tax accounting does not take place in a vacuum. We are frequently called upon to provide transactional tax services as transactions are developing. We pride ourselves on providing real-time information upon which our clients can rely, knowing that the advice they receive in the heat of the deal will stand up when the time comes to ensure compliance with ASC 740.