The Value of Net Operating Losses
14 Pages Posted: 21 Oct 2008
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: 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
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