Reverse acquisition

Reverse acquisition takes place when a private entity wants to become a public entity but does not want to register its equity shares. In such case,private entity approaches a public entity,the one which is listed, to acquire its (private entity’s) equity interests in exchange for the equity interests of the public entity In a reverse acquisition, the entity issuing equity interests is legally the acquirer, but for accounting purposes is considered the acquiree. Accounting for business combination is done from the perspective of accounting acquirer and not legal acquirer.


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