Best Response
sick_willy:
You'll get lawyers and accountants to do an estimate of it when you're acquiring a company and doing a step-up in an asset purchase, for instance. Never had to do it in banking though.

The step-up with a 338 or pure asset purchase will have (could have I should say) implications on the acquirers tax basis which can have a big impact on your B-Tax / A-Tax val. delta. However, in a standard LBO modeling situation, you're only concerned w/ debt service and mandatory repayment so it's less of an concern.

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Stringer Bell:
sick_willy:
You'll get lawyers and accountants to do an estimate of it when you're acquiring a company and doing a step-up in an asset purchase, for instance. Never had to do it in banking though.

The step-up with a 338 or pure asset purchase will have (could have I should say) implications on the acquirers tax basis which can have a big impact on your B-Tax / A-Tax val. delta. However, in a standard LBO modeling situation, you're only concerned w/ debt service and mandatory repayment so it's less of an concern.

It'll impact your amortization and therefore the amount of cash taxes you need to pay

 

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