Because private equity investors do not always incorporate pure GAAP financial metrics in valuing a target upon acquisition or exit, financial statement presentation may not be one of their top priorities. But those who have sustained a surprise hit to earnings or EBITDA, or had a closing or exit delayed because of financial reporting issues may think differently.
Such issues could become more common with the use of fair value reporting, unless the financial reporting valuation process is managed properly and valuation and accounting competencies appropriately combined.
