Which of the following situations best describes a business combination to be accounted for as a statutory merger?
A)Both companies in a combination continue to operate as separate,but related,legal entities.
B)Only one of the combining companies survives and the other loses its separate identity.
C)Two companies combine to form a new third company,and the original two companies are dissolved.
D)One company transfers assets to another company it has created.

Question

Quizplus · Accepted Answer

In a statutory merger, one of the companies involved retains its legal identity while the other company is absorbed and ceases to exist as a separate legal entity. This is what is described in option B.

Which of the Following Situations Best Describes a Business Combination