The Value of Net Operating Losses

14 Pages Posted: 21 Oct 2008

See all articles by Mary Margaret Frank

Mary Margaret Frank

University of Virginia - Darden School of Business

Jonathan Right

affiliation not provided to SSRN

Abstract

This technical note provides an overview of the tax law governing the use of a target's net operating losses (NOLs) and other tax attributes by the acquirer. Every transaction requires the acquirer to assess the impact of any limitations under the tax law on the use of the target's NOLs. Because these limitation affect the value of the NOLs, they affect the price the acquirer is willing to pay for the loss corporation and ultimately the optimal deal structure.

Keywords: mergers and acquisitions

JEL Classification: G24, H25, G12

Suggested Citation

Frank, Mary Margaret and Right, Jonathan, The Value of Net Operating Losses. Darden Case No. UVA-C-2256, Available at SSRN: https://ssrn.com/abstract=1276995 or http://dx.doi.org/10.2139/ssrn.1276995

Mary Margaret Frank (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4432 (Phone)
434-243-5021 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/frank.htm

Jonathan Right

affiliation not provided to SSRN

No Address Available

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