Content on this page pertains to the accounting aspects of complex merger and acquisition transactions as a result of business combinations. Please visit PwC’s Acquisitions page for other key elements to consider.
The economic downturn, lack of available funds in the credit markets and continuing market uncertainty have put pressure on companies to look for more creative alternatives in pursuing mergers, acquisitions, strategic investments and/or divestiture options. Examples of recent alternative transactions include seller-financed acquisitions, leveraged buyouts, "UP-C" or similar pre-IPO partnership structures, joint venture arrangements, step-acquisitions (many times involving put / call options), corporate restructurings and partial divestitures. All of these scenarios involve complex accounting issues.
Additionally, even more straightforward M&A transactions and non-controlling investments can introduce complex issues, including accounting and financial reporting for common control (or "put-together") transactions, assessing the necessity for push-down accounting and distinguishing between equity and cost method investments.
An enhanced appreciation of how to account for these complex transactions often facilitates deal evaluation, consideration of alternative structures, and subsequent communication with stakeholders.
Impacts to companies:
What companies should do: