Question

List at least two differences in accounting treatments between business combination with dissolution and business combination in the absence of dissolution?

Answer 1

business combinations with dissolution without dissolution the acquired company looses its name and legal form and take the name and legal name of the acquiring existance company both the merged companies continue to exist in their legal form assets all the assets and sometimes liabilities are assumed by transferred acquiring company usually for some consideration the assets and liabilities are not transferred management the acquiring company takes over the control and managemnet and control is confined to both the respective and control management completely companies unless and until stated all the stock (100%) is transferred in the name of the common stock acquiring company only the majority of stock or voting rights (51%) have acquired

dissolution means winding up of the comapny, means the company ceases to exist

business combinations as the name suggest is the combination of two comapnies whether it be a merger (both companies merge together to operate an dfunction) or acquisition (acquiring the company completely)