Don't let push-down accounting push you around (M&A snapshot)

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M&A snapshot 04/25/2012 by Assurance services
Don't let push-down accounting push you around (M&A snapshot)

At a glance

Companies preparing to go public often face a number of issues related to their financial statements. A common issue is whether push-down accounting should be applied. Push-down accounting is the practice of adjusting the standalone financial statements of an acquired company to reflect the basis of accounting of the buyer. This edition of Mergers & acquisitions - a snapshot, provides an overview of the SEC's rules on push-down accounting and a high-level summary of the complexities and opportunities that can arise in applying the rules to common deal structures.

Are you planning to take your company public at some point? Market volatility and uncertain economic times require companies to be nimble enough to take advantage of IPO windows when they open. Delay is the last thing a company and its owners want to experience during an open IPO window - particularly when the issue could have been addressed earlier in the process.

Companies preparing to go public often face a number of issues related to their financial statements. A common issue is whether push-down accounting should be applied. Push-down accounting is the practice of adjusting the standalone financial statements of an acquired company to reflect the basis of accounting of the buyer. Though the rules on push-down accounting may seem like "old news," they are not straightforward and the M&A standards introduce new complexities. Last minute surprises pertaining to push-down accounting can derail an IPO, because they often take significant time and effort to resolve.

This edition of Mergers & acquisitionsa snapshot, provides an overview of the SEC's rules on push-down accounting and a high-level summary of the complexities and opportunities that can arise in applying the rules to common deal structures.