Leveraged buyout transactions must be accounted for using entirely the new basis of accounting or entirely the old basis of accounting-never part new basis and part old basis.

Question

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In a leveraged buyout, the accounting for the acquired assets and liabilities may involve a mix of carrying over the historical cost of some items (old basis) and recording others at their fair market value (new basis), depending on the specifics of the transaction and applicable accounting standards.

Leveraged Buyout Transactions Must Be Accounted for Using Entirely the New