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In an acquisition, how should I value the items received?
According to the Principle of tax neutrality, the acquiring entities must value the elements received, for tax purposes, at the same values as they had in the transferring entities prior to the execution of the operation, maintaining the seniority date.
Will the date of accounting effects in mergers and divisions between group companies be the date of registration of the operation in the Mercantile Registry or the date established in the merger-division project?
No, neither of two dates.
According to the PGC, “In merger and division operations between group companies, the accounting effect date will be the beginning of the year in which the merger is approved, provided that it is after the moment the companies have joined the group.
If one of the companies have joined the group in the year in which the merger or spin-off occurs, the accounting effect date will be the acquisition date”, which is the date of approval of the operation at the General Meeting by the absorbed company.
There is an exception, with regard to the first of the paragraphs. In the event that between the date of approval of the merger in the Meeting and its registration is the close of the fiscal year and this registration occurs after the period provided to formulate the annual accounts. In this case, the accounting effect date is the beginning of the fiscal year in which the registration takes place. The latter, without prejudice to the fact that the comparative information of the annual accounts for the fiscal year of registration must include the effects of the operation.
Will the equity of the acquiring company increase by the value given in writing to the absorbed company?
Not necessarily. According to, PGC, “The assets acquired are valued at the amount that would correspond to them, once the operation has been carried out, in the consolidated annual accounts of the group or subgroup, according to the aforementioned Standards for the Formulation of the Consolidated Annual Accounts ”, and at the date of accounting purposes .
The differences that may exist between the values in writing and those described above, will be taken against reserves.
Therefore, the net worth of the acquiring company will increase by the amount of assets less liabilities of the acquired valued according to the PGC and not according to “legal” values.