Different treatment for tax effect in Business Combination and Consolidation
In business combination, even the assets in subsidiary's balance sheet are in carrying amount and later on provided fair value, we only record the fair value regardless the tax effect on them (as revaluation of the assets, tax effect should rise because revaluation changes carrying amount, not tax base, and new carrying amount should be the fair value)
In consolidation, there are business combination valuation entries to deal with revaluation issues (tax effect and BCVR).
Why do we treat them differently? Why don't we consider tax effect in business combination as well?
Thanks
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