Quasi-Reorganization

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Quasi-Reorganization

In American accounting, the act of changing a company's records to eliminate a deficit in retained earnings by restating its balance sheet as if it were in bankruptcy. No bankruptcy is actually filed, however, and shareholders must agree to the changes. Quasi-reorganizations are controversial because they do not improve a company's actual state; rather, they simply make its books appear healthier. It is rarely done in practice.
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Reduction of the nominal value of Indomobil's stake in a number of subsidiaries as a result of a decline in the nominal value of each subsidiary under quasi reorganization.
This treatment now complies with accounting rules that require the Company to credit the tax benefit from the utilization of net operating losses generated prior to the Company's 1992 quasi reorganization directly to paid in capital rather than to income.
It is our conclusion that the quasi reorganization concept has little theoretical validity, and we urge the Financial Accounting Standards Board to delete it from GAAP.
43 reinforced an earlier rule permitting an accounting procedure known as a corporate readjustment--or more commonly, a quasi reorganization.
See exhibit 1, page 80, for a review of selected quasi reorganization literature.
On the other, the DM says some observers question whether a quasi reorganization is good accounting and whether it should result in a new basis of accounting.
Those steps were the refinancing of our trust preferred securities, the quasi reorganization in August 2002, and the Bank's issuance of perpetual non-cumulative preferred stock.
Similarly, financial reporting varies depending on whether a debt restructuring occurs within the context of a quasi reorganization, a troubled debt restructuring or as part of a bankruptcy settlement.
The first alternative available to a company experiencing continued book losses resulting in a retained earnings deficit is to reorganize on its own - a quasi reorganization.
There are a number of benefits to a quasi reorganization.
Assuming the company does not elect quasi reorganization, a restructuring of debt by a financially distressed company falls under Financial Accounting Standards Board Statement no.
Chapter 11 bankruptcy and quasi reorganizations are included here, as are unleveraged recapitalizations and subsidiary spinoffs.
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