If your company is planning to merge with or buy another business, your attention is probably on 进行yibo亿博 and negotiating deal terms. But you also should address the post-关闭 financial reporting requirements for the transaction. 如果不是, it may lead to disappointing financial results, 重述, and potential lawsuits after the dust settles.
Here’s guidance on how to correctly account for merger and acquisition transactions under U.S. Generally Accepted Accounting Principles (GAAP).
Identify assets and liabilities
A seller’s GAAP balance sheet may exclude certain intangible assets and contingencies, such as internally developed brands, 专利, 客户名单, 环境要求, 和未决诉讼. Overlooking identifiable assets and liabilities often results in inaccurate reporting of goodwill from the sale.
Private companies can elect to combine noncompete agreements and customer-related intangibles with goodwill. If this alternative is used, it specifically excludes customer-related intangibles that can be licensed or sold separately from the business.
It’s also important to determine whether the deal terms include arrangements to compensate the seller or existing employees for future services. 这些款项, along with payments for pre-existing arrangements, aren’t part of a business combination. 除了, 收购相关成本, such as finder’s fees or professional fees, shouldn’t be capitalized as part of the business combination. Instead, they’re generally accounted for separately and expensed as incurred.
When the buyer pays the seller in cash, the purchase price (also called the “fair value of consideration transferred”) is obvious. But other types of consideration muddy the waters. Considerations exchanged may include stock, 股票期权, 替代奖, 和或有支付.
例如, it can be challenging to assign a fair value to contingent consideration, such as earnouts payable only if the acquired entity achieves predetermined financial benchmarks. Contingent consideration may be reported as a liability or equity (if the buyer will be required to pay more if it achieves the benchmark) or as an asset (if the buyer will be reimbursed for consideration already paid). Contingent consideration that’s reported as an asset or liability may need to be remeasured each period if new facts are obtained during the measurement period or for events that occur after the acquisition date.
Next, you’ll need to split up the purchase price among the assets acquired and liabilities assumed. This requires you to estimate the fair value of each item. Any leftover amount is assigned to goodwill. 本质上, goodwill is the premium the buyer is willing to pay above the fair value of the net assets acquired for expected synergies and growth opportunities related to the business combination.
In rare instances, a buyer negotiates a “bargain” purchase. Here, the fair value of the net assets exceeds the purchase price. Rather than book negative goodwill, the buyer reports a gain on the purchase.
Make accounting a forethought, not an afterthought
Merger and acquisition transactions and the accompanying financial reporting requirements are uncharted territories for many buyers. Don’t wait until after a deal closes to figure out how to report it. Merger and acquisition strategies can spell the difference between success and failure and 我们可以帮助你 understand the accounting rules and the fair value of the acquired assets and liabilities 之前 关闭.