Review of Financial Statements Essay Example | Topics and Well Written Essays - 250 words

Review of Financial Statements - Essay Example In this case, also all type of liabilities accounts i.e. current and non current liabilities accounts will be affected. For example, accounts purchases, sundry current liabilities, interest payable, bank loans, long term debt etc 2) The financial statements which will show the impact of the transaction at the time of merge will be balance sheet and cash flow statements. Since in merger a firm acquires another firm therefore balance sheet will record the changes in the assets as well as the liabilities of the firm and the resulting changes in them. Another financial statement which will be affected by this is cash flow statement which will record the movement of any cash paid to the owners/shareholders as the consideration for the merger. (Warren, Reeve, & Duchac, 2008) It is also important to note that the income statement may also be affected if acquiring firm has to expense out some earlier losses of the acquiring firm through provisioning. However, this may not be