| Summary: | 碩士 === 東吳大學 === 會計學系 === 102 === With the world economic development under the trend of globalization, competition in both domestic and international markets has increasingly become intense. To win the battle of competition, merger and acquisition (M&A) are a vital strategic decision taken for creating corporate value. According to statistics from Department of Commerce, the Ministry of Economic Affairs, there were 1,367 acquisitions with values over 659.9 billion from 2006 to 2012.
In acquisition companies can not only acquire tangible assets but also intangible assets. Goodwill arises as a result of the acquisition of one company by another for a premium value. The sources of goodwill may come from many factors such as a company’s brand name, solid customer base, good customer relations and any patents or proprietary technology. Goodwill, in fact, arises from a combination of many factors. No corporate spending could be specifically identified as goodwill. Due to limited trading activities and identification problems, evaluation of intangible asset such as goodwill is usually more challenging. From the perspective of accounting practice, goodwill can only be recognized in acquisitions. Therefore, merger and acquisition and recognition of goodwill are naturally highly related issues.
The cost of goodwill can be calculated from the total purchase price minus net identified assets (i.e., fair values of tangible asset and other intangible assets minus liabilities). Therefore, the main argument in tax is how to identify the original acquisition costs and fair value of identifiable net assets. Under current accounting/taxation practice, the government believes the taxpayer should prove the actual cost of the acquisition in honest and reasonable ways to measure the fair value of identifiable net assets.
This study examines the issue of merger/acquisition taxation from the perspective of security exchanges by investigating several real cases, thus analyzing the impact of the merger/acquisition cost and recognition of goodwill in taxation. Acquisition through security, because of the security exchange ratio and security face value, can overestimate the acquisition cost and goodwill value.
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