Commentary

141.1 Trade debts and non-trade debts of the target company

COMPANIES vol 11 acquisitions, mergers, demergers

141.1 Trade debts and non-trade debts of the target company

3: TARGET COMPANY AS DEBTOR

141 General principles

141.1 Trade debts and non-trade debts of the target company

Trade debts and non-trade debts are taxed under the loan relationship rules, with computation usually under generally accepted accounting practice (GAAP). Debits and credits to which a company is a party for the purposes of its trade (such as banks and lending institutions) are brought into account in calculating those profits (and which we will not discuss further in this chapter). In non-trading loan relationships, debits and credits are aggregated, with net non-trading credits taxed as part of the company’s income for the accounting

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