(a) Scope. Except as provided in para-graphs (b) and (c) of this section or as the context otherwise requires, the principles of paragraphs (b) through (g) of § 1.338–5 apply in determining the ad-justed grossed-up basis (AGUB) for tar-get and the consequences of a gain recognition election. AGUB is the amount for which new target is deemed to have purchased all of its assets in the deemed purchase under § 1.336–2(b)(1)(ii) or the amount for which old target is deemed to have purchased all of its as-sets in the deemed purchase under § 1.336–2(b)(2)(ii). AGUB is allocated among target's assets in accordance with § 1.338–6 to determine the price at which the assets are deemed to have been purchased. If a subsequent in-crease or decrease with respect to an element of AGUB is required under general principles of tax law, redetermined AGUB is allocated among target's assets in accordance with § 1.338–7.