Although public firms are required to file their financial statements with the Securities and Exchange Commission in accordance with GAAP, so-called pro forma financial statements are used as hypothetical representations of the potential performance of the acquirer and target firms if they were merged.

Question

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Pro forma financial statements are used to represent the potential performance of the acquirer and target firms if they were merged, and are not the same as GAAP financial statements that public firms are required to file with the Securities and Exchange Commission.

Although Public Firms Are Required to File Their Financial Statements