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.
Understanding a potential acquiree’s (“M&A Target”) reporting of its operating results is critical to determining potential purchase price adjustments. The process of determining purchase price adjustments is more complicated when an M&A target is outside of the United States, because typically a buyer receives the non-US target’s financial information prepared on a basis that is inconsistent with how the buyer reports operating performance.
Because operating performance measures have a direct impact on how buyers value the target business, US bidders need to understand the basis of a foreign target’s financial information, such as the application of non-US GAAP as well as the target’s accounting policies, and identify where GAAP and policy are not aligned with the buyer’s basis of preparing its financial information.
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