Financial Assets and Investing
38
Book Review
The Process of Company Mergers
in the Context of Legislation, Accounting and Taxes
Authors: Jaroslav Sedláček, Eva Hýblová, Alois Konečný,
Zuzana Křížová, Petr Valouch
Editor: Masaryk University
Year: 2013
The assessed monograph is devoted to the processes of company mergers in the
legal, accounting and tax contexts and it brings interesting findings about
mergers implemented in the Czech Republic. The presented results are based on
the research that was supported by the Czech Science Foundation. The reviewed
monograph represents a comprehensive work devoted to the important issue of
company mergers from different, but logically connected aspects. It fills the gap
in the in professional literature since it deals with the mergers in the Czech
Republic in the way the other publications have not and provides interesting
results of empirical research using a unique dataset.
The monograph is divided into eight chapters which are logically connected. In
the second chapter (the first one is the Introduction), the authors define mergers
in the context of business transformations. The characteristics of the individual
forms of joining of the companies such as acquisitions, mergers and foreign direct
investments are presented. Moreover, the problems related to mergers and
acquisitions are discussed.
The development of mergers and acquisitions in the world and in the Czech
Republic is introduced in the third chapter. The comparison of the behaviour in
the mergers and acquisitions markets in the Czech Republic and abroad is
included in the chapter. The authors also consider the impact of the last global
financial and economic crisis on mergers and acquisitions.
The fourth chapter presents empirical research into mergers in the Czech
Republic. It brings results of unique research which was done using a data sample
that covers a 10-year period (2001–2010) and allowed the authors to statistically
process company mergers implemented in the Czech Republic. In addition, the
causes of the failures of mergers are also provided.
The motives of mergers in the Czech Republic are a subject of the fifth chapter.
The motives are described in the detail based on the current literature.
Furthermore, the chapter includes the evaluation of the empirical study based on
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the questionnaire survey that was devoted to the research into accounting and
tax issues related to mergers in the Czech Republic.
The sixth chapter is devoted to company transformations and their commerciallaw
legislation. The changes brought by the act on transformations and the
changes brought by the amendment from the year 2012 are discussed. The
directly applicable standards of the European accounting act are mentioned as
well.
The seventh chapter brings a complex view of the accounting methods to deal
with the process of company mergers. It compares the Czech accounting
standards with the IFRS (International Financial Reporting Standards) and with
the US GAAP (Generally Accepted Accounting Principles).
The last chapter deals with the tax aspects of company transformations. Within
this chapter, the authors were trying to find whether and what role the tax motive
has when the domestic companies make a decision about merger. The
problematic aspects of taxes related to mergers are also discussed and the
recommendations for reducing the tax administrative burden and problems are
proposed.
The monograph contributes to the discussion about partial issues of merger
process in the area of accounting, tax and law.
Veronika Kajurová
Masaryk University
Faculty of Economics and Administration
vkajurova@mail.muni.cz