Merger deficit and surplus

Sources and assumptions

Calculation assumptions

• The computation assumes the transaction is measured at BOOK VALUE, which is where a technical deficit normally arises. Three of the four configurations in the official doctrine lead there: common control the right way round, common control the reverse way round, and separate control the reverse way round. Only a merger between entities under separate control carried out the right way round is measured at fair value, and then produces no technical deficit. The measurement basis is not inferred here; check it before entering figures.
• The allocation stops at the TWO AGGREGATES the rule distinguishes: identified assets excluding goodwill on one side, goodwill on the other. The asset-by-asset split, pro rata to their respective unrealised gains, remains to be made in the accounts — the deficit allocated to each asset is then tracked in a dedicated account per asset category.
• Liabilities not recognised for want of an accounting obligation, such as pension provisions and deferred tax liabilities, are deducted from the CAP on the technical deficit. No official source read states whether they are then charged first against goodwill or pro rata across the assets, so the calculator does not settle that allocation.
• The tax side stays QUALITATIVE: the calculator identifies the applicable regime and flags what is not deductible, it does not quantify the tax. In particular it does not model the corporation tax charge, the share of costs and expenses on the cancellation gain under the ordinary regime, or the tax adjustments for provisions previously booked against the shares.
• Not taken into account: the adjustment of the deficit for price adjustments on the shares occurring after the merger, and the absence of any deficit on the cancellation of treasury shares transferred to the absorbing company. Both corrections appear in the definition and apply before the computation.