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Quasi reorganization
a voluntary accounting procedure by which an
entity with an accumulated retained earnings
deficit adjusts its accounts to obtain a fresh
start.
Quasi reorganization
may somewhat resemble a legally executed
reorganization, but the procedure is
accomplished without formal court
proceedings and does not contemplate the
creation of a new corporation,
Quasi reorganization
a change in corporate ownership, or a change
in the rights and interests of creditors or
owners. The procedure does, however,
normally require the approval of either the
board of directors or shareholders
depending on the laws of the state of
incorporation
ASC 852-740-45-3
The tax benefits of deductible temporary
differences and carryforwards as of the date of a
quasi-reorganization as defined and contemplated
in Subtopic 852-20 ordinarily are reported as a
direct addition to contributed capital if the tax
benefits are recognized in subsequent years.
General
ASC 852-20 discusses the accounting to be
applied in a quasi reorganization. Additional
information on quasi reorganizations,
including related accounting guidance, is
available in the PricewaterhouseCoopers
Accounting and Reporting Manual, Section
5590.2, Quasi Reorganizations.