Week 2: Business Combinations and Leveraged Buyouts Various parties, including companies, analysts, accountants, and regulatory bodies,...

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Week 2: Business Combinations and Leveraged Buyouts Various parties, including companies, analysts, accountants, and regulatory bodies, attempted to block the amendment to business combinations that were put forward jointly by the IASB and the FASB. The new standard places an emphasis on fair values, even in cases where less than 100% of the equity interests are purchased, which has the potential to increase the amount of goodwill realized in a transaction. What implications does this change have on the underlying economic fundamentals of a transaction? What problems and challenges does a leveraged buyout present down the road to both the acquirer and the target? Week 2: Business Combinations and Leveraged Buyouts Various parties, including companies, analysts, accountants, and regulatory bodies, attempted to block the amendment to business combinations that were put forward jointly by the IASB and the FASB. The new standard places an emphasis on fair values, even in cases where less than 100% of the equity interests are purchased, which has the potential to increase the amount of goodwill realized in a transaction. What implications does this change have on the underlying economic fundamentals of a transaction? What problems and challenges does a leveraged buyout present down the road to both the acquirer and the target?

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The detailed answer for the above question is provided below ANSWER The changes to the accounting standards for business combinations as proposed by the International Accounting Standards Board IASB a... View the full answer