Accounting for Mergers & Acquisitions
Learn how to apply accounting and federal income tax principles to project earnings and cash flows, specifically of the post-combination entity.
CPE Credits: 7
This course is a component of the M&A Professional Certificate
Prerequisite knowledge:
- Solid understanding of financial accounting and of mergers and acquisitions concepts and structures.
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To make it even easier to learn, you can finance your program through Affirm.
Loans offered through Affirm are available in the U.S. and Canada.
Module 1: Equity Method of Consolidation
- Determining the appropriate tax rate for equity method investments
- Differed tax items recognized for equity method investments
- Phantom depreciation and goodwill
- Effects of intercompany transactions
- SEC views and guidelines for applying the equity method
- Purchase Accounting for Business Combinations
Module 2: Purchase accounting basics-concepts of fair value and goodwill
- Calculating net identifiable assets-write-ups, write-downs, and deferred taxes
- Adjustment of LIFO inventories to reflect fair value
- Estimating the write-up to intangible assets from recognizing the target's self-created assets
- Transaction and market impacts on the valuation of long-term liabilities
- Calculating the purchase price, goodwill, and the treatment of transaction fees
- How to treat negative goodwill, how it is allocated and when it results in an extraordinary gain
Module 3: Forecasting the Performance of the Combined Company
- Analytic objectives-impact of earnings accretion and dilution on equity value; analysis of cash flows for debt service
- How the combined company's form influences the approach to forecasting-mergers versus acquisitions
- Forecasting synergies-common omissions that overstate operating results
- Cash flow effects from net operating loss limits
Module 4: Internal Revenue Code Section 338(g) and 338(h)(10) Transactions
- Concept of inside and outside basis as it applies to deemed asset sales transactions
- Calculating the Aggregate Deemed Sales Price
- Calculating the Adjusted Grossed-Up Basis
- Analyzing the transaction costs and benefits