How will the National Accounts record transactions in the case of a corporation that goes bankrupt but is acquired by new owners and continues to operate?
The transactions associated with the transition of the ownership will largely be recorded in the Financial Flow Accounts and the National Balance Sheet Accounts (including the other change in asset account which is not explicitly published in Canada). In general, the old corporation (or other legal structure) will cease to exist with a significant downward revaluation of any liabilities outstanding based the creditors claim on the assets of the old firm. The new owners will have to create a new legal structure and provide funds to support the ongoing operations of the new enterprise and may need to compensate, at least partially, the creditors of the previous corporation. This may be necessary due to the legal claim the creditors have on the assets of the previous corporation or strategically necessary if some creditors provide key inputs required for the continuing operation of the business. These financial account transactions are generally the subject of a negotiated settlement betw
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