Carve-out Financial Statements--A challenging process (M&A snapshot)

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M&A snapshot 09/30/2010 by Assurance services
Carve-out Financial Statements--A challenging process (M&A snapshot)

At a glance

In many M&A transactions, companies looking to dispose of non-core businesses or to generate cash may sell only a portion of their operations (e.g., a subsidiary or a business unit). As part of these transactions, a seller may need, or want, to prepare separate financial statements of the operations being sold, commonly referred to as carve-out financial statements. The preparation of these financial statements can be challenging as there is limited guidance covering their composition. This volume of Mergers & Acquisitions - A snapshot, focuses on some of the issues companies may face when preparing carve-out financial statements, how those statements may differ from their own financial statements, and how the M&A Standards may impact...

In many M&A transactions, companies looking to dispose of non-core businesses or to generate cash may sell only a portion of their operations (e.g., a subsidiary or a business unit). As part of these transactions, a seller may need, or want, to prepare separate financial statements of the operations being sold, commonly referred to as carve-out financial statements. The preparation of these financial statements can be challenging as there is limited guidance covering their composition. This volume of Mergers & Acquisitions - A snapshot, focuses on some of the issues companies may face when preparing carve-out financial statements, how those statements may differ from their own financial statements, and how the M&A Standards may impact the accounting for transactions that are reported in the carve-out financial statements.