Consolidated Financial Statements – Ownership, Income Taxes, and
Legal Reorganizations"
• Determine the fundamental advantages to a business combination of filing
a consolidated tax return. Next, analyze the main reasons why members of
a business combination file separate returns. Provide a rationale for your
response.
Differentiate between the two (2) categories of liabilities (i.e., fully secured
and partially secured) that have priority in business liquidation. Analyze the
main reasons why unsecured creditors favor reorganizing an insolvent
company rather than forcing it into liquidation. Provide support for your
rationale.