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Originally Posted by Locke
Mark to Market Accounting.  |
The articles also cite there is also some major accounting advantage in getting the loss off the books, and written off, prior to going into the merger (I don't really get this, as my accounting knowledge is lacking):
https://www.forbes.com/sites/robsalk...h=70e829af64f9
Quote:
The merged company has a limited time to identify and itemize these specific merger-related costs that fall under the set-aside. Anything that goes into this corporate “burn bag” gets taken as a write off or sunk cost. Anything that doesn’t becomes part of operating profit and loss going forward.
This window provides a “get out of jail free” card for the company to get any project that carries any risk of not being profitable off the books, at a unique moment when its termination becomes just another cost of the merger rather than a specific operational failure. Is the project not a sure money-maker? Or are there even slight concerns about the quality of the finished product? Pull the plug.
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This article also blames accountants for having the movie cancelled....get him Nadal Fan!