Management and Organizational Studies 2276A/B Lecture Notes - Lecture 8: Financial Statement, Accounts Receivable, Target Canada

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2276A/B
• Professor: Frederick King

Document Summary

Informal agreement on terms of the deal: two parties can come together formally or informally, decisions to follow: legal or business. First legal decision: are you buying/selling assets or shares: buy the assets used to carry business vs. buy the company that owns the assets, purchaser. Buy only assets: can pick and choose good assets. Target canada sold its inventory, not the company. Less liability for purchaser (if you buy the company you must review taxes, litigations, due diligence, etc) Tax advantages: can amortize the capital assets. Buy shares: ownership of assets doesn"t change (still belong to target company), ownership of shares is what changes therefore cannot claim depreciation of assets. Buy assets: can claim an amount of reasonable depreciation to deduct from yearly taxes. For private companies (ccpc), you can sell shares up to certain amount without paying taxes (tax savings)