Cross border deals are increasing despite political uncertainty, and that means that in order to be financially bilingual you need be knowledgeable of IFRS. In this podcast hear PwC's Jim Gazley, David Schmid, Christopher Chung, and Marco Noetzli discuss the impacts of IFRS in assessing the deal, closing the transaction, and ongoing post-deal requirements. We also highlight some global M&A trends that we're seeing in the marketplace.
| Duration 27:05
Despite some of the geopolitical uncertainty around the world, cross-border deals persist and reflect a large proportion of the global deals market. We're seeing a move from primarily US investors looking overseas as an entry point into new markets or emerging markets, to now overseas capital coming into the US. As such, there is a need for professionals looking at companies both in the US or overseas to be financially bilingual - to really understand the accounting for both US GAAP and IFRS.
This is important during deal assessment - as there are a number of differences between IFRS and US GAAP which can impact metrics, such as EBITDA, that may be used to value the business. So being able to convert financial statements from IFRS to US GAAP (or vice versa) is of key importance.
Additionally, setting up a project management office at the beginning of a transaction to set clear direction, ensure there’s comprehensive planning, and ensure there’s adequate conversion timeline to deal closure is essential to successful conversion.
Bottom line - IFRS and US GAAP are not identical so being financially bilingual is increasingly important in a global deal environment (both as a buyer and a seller).
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