Observations from the front lines
September 2012
At a glance
Accelerated share repurchase (ASR) programs are common structures used to buy stock immediately and determine the price based on an average over time. Flexibility in designing these programs provides benefits but reporting complexities can have unwanted impacts on financial statements if not understood.
Observations from the front lines provides PwC's insight on current economic issues, our perspective regarding the business impacts, and actions we have seen companies taking to effectively address those issues.
Accelerated stock repurchases: October 2012
Accelerated share repurchase (ASR) programs are common structures used to buy stock immediately and determine the price based on an average over time. Flexibility in designing these programs provides benefits, but it also comes with potential reporting complexities that if not well understood in the design phase, can have unwanted impacts on financial statements.
Highlights in this issue:
- Excess cash and a desire to affect key financial metrics are primary motivating factors in executing a share buyback.
- Accelerated share buybacks can be structured to address a variety of needs for companies, investment banks, and regulators.
- Accounting, tax, and legal implications are dependent on program design.
- Balance your financial goals with your reporting requirements, and you’ll be better positioned throughout the deal process.
Read other issues of Front lines:
- Decoding key metrics in cross-border acquisitions: March 2013
- Beware of cliffs and waterfalls in renewable investments: February 2013
- Standard setters revisit push down accounting requirements: January 2013
- Avoiding hits to earnings when swapping fixed debt to floating: December 2012
- Hedging foreign exchange risk in a more volatile world: September 2012