DTL created in M&A + taxable income questions

Hi guys,

When Bidder acquires Target company above book value, Target assets are adjusted to their Fair Value thanks to write-ups/downs. I understand that under Stock Purchase, DTLs are created as Tax accounting doesnt allow for these assets write-ups to be used to lower the taxable income. Book and Tax books should converge over time.

However, 1. Wouldnt Bidder benefit anyways from higher D&A post transaction from tangible assets purchased which in turn would lower taxable income? (but no tax benefits from Intangibles and Goodwill in the case Bidder is a public company) 2. In case Bidder is a private company, it can amortize goodwill under GAAP, so doesnt that also reduce taxable income? 3. If I got 1 & 2 right, wouldn't that mean that Private companies benefit the most from doing M&A as they can claim higher D&A from assets AND amortize goodwill?

Thanks much!

1 Comments
 

Molestiae maxime quo odio modi ad quisquam ut. Modi dolorem necessitatibus voluptas officiis et. Ipsa vero quo corporis libero autem sint. Incidunt quasi beatae neque reiciendis nesciunt qui. Cumque dicta nam et cumque quia in est. Quia labore veniam velit officiis. Veritatis consectetur odit impedit ut iste.

Quaerat natus et vel fugiat ea est et. Aliquam est maxime cum quasi dolor laudantium. Ut laudantium harum voluptas facilis aliquid placeat. Omnis cumque asperiores non tempora iusto repudiandae.

Id nisi repellendus omnis. Nihil necessitatibus quibusdam facilis dolores sed fugit sint. Nam perferendis repudiandae corporis vitae hic unde aut.

Career Advancement Opportunities

November 2026 Investment Banking

  • Evercore 01 99.5%
  • Moelis & Company 01 99.0%
  • JPMorgan 01 98.4%
  • Guggenheim Partners 02 97.9%
  • Morgan Stanley 06 97.4%

Overall Employee Satisfaction

November 2026 Investment Banking

  • Moelis & Company No 99.5%
  • Morgan Stanley 02 99.0%
  • Evercore 01 98.4%
  • Banco Santander 02 97.9%
  • BMO Capital Markets 13 97.4%

Professional Growth Opportunities

November 2026 Investment Banking

  • Evercore 01 99.5%
  • Moelis & Company 01 99.0%
  • Morgan Stanley 05 98.4%
  • Goldman Sachs 01 97.9%
  • JPMorgan No 97.4%

Total Avg Compensation

November 2026 Investment Banking

  • Vice President (16) $429
  • Associates (57) $264
  • 3rd+ Year Analyst (8) $210
  • 2nd Year Analyst (29) $183
  • Intern/Summer Associate (16) $161
  • 1st Year Analyst (84) $151
  • Intern/Summer Analyst (77) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Secyh62's picture
Secyh62
99.0
4
kanon's picture
kanon
99.0
5
Betsy Massar's picture
Betsy Massar
98.9
6
DrApeman's picture
DrApeman
98.9
7
GameTheory's picture
GameTheory
98.9
8
CompBanker's picture
CompBanker
98.9
9
dosk17's picture
dosk17
98.9
10
Mimbs's picture
Mimbs
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”