Which of the following statements best describes the application of the continuity of enterprise principle to a Type A tax-deferred reorganization?
A) The continuity of business enterprise principle must be satisfied for both the acquirer and the target corporation.
B) The continuity of business enterprise principle must be satisfied for only the target corporation.
C) The continuity of business enterprise principle must be satisfied for only the acquirer.
D) The continuity of business enterprise principle does not have to be satisfied as long as the business purpose principle is satisfied.
Answer: B