In early December 2007, the Financial Accounting Standards Board (FASB) issued two new standards that changes the way companies will account for and report their deals. The International Accounting Standards Board (IASB) has issued related standards in January 2008.
The new US standards, FAS 141R, business combinations, and FAS 160, noncontrolling interests in consolidated financial statements, not only put a greater focus on financial reporting as it moves toward fair value; they also call for heightened diligence and valuation. Although these changes will not be effective until 2009 and early adoption is prohibited, dealmakers should be aware of how these changes will affect their M&A process and their ability to get the deal done.
