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Hi All,
Can someone point me out to a link, or explain to me what this is all about?
Thanks in advance.If a company is in trouble it has two options:
-liquidation
-reconstruction
Classic reconstruction is simply replacing the company’s debt with equity so it can continue operating.
In the exam the examiner could simply give you a proposed reconstruction scheme and ask you to record the double entries and assess whether the scheme will be beneficial. (see Decany from Dec 2011)Its not really hard but you have to be perfect with double entry so I would suggest you treat this as a low profile topic.
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