BDO Knows Financial Institutions & Specialty Finance

December 2013

Accounting standards require that deferred taxes be recorded on every difference between the book and tax basis of assets and liabilities acquired in an acquisition save one: the excess of goodwill recorded for financial statement accounting over the tax basis of goodwill acquired. The principles can be tricky to apply, especially in situations where the deal is structured as an asset purchase versus a stock purchase, or when there is a bargain purchase price. With this article, Glenn James, a member of the Financial Institutions & Specialty Finance practice, simplifies the subject to help you avoid mistakes.