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Learn/Accounting for the acquirer
LearnAccounting for the acquirer

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B Basic

  • How a deal lands on the buyer's statements9m
  • Purchase price allocation and goodwillPro10m
  • From headline price to cash at closingPro8m

A Advanced

  • Taxes in a deal: stock versus assetPro11m
  • Earnings after the dealPro10m
  • How much you own decides the accountingPro9m
  • Earnouts and goodwill impairmentPro9m
  • FlashcardsPro0/16
  • Basic quizPro80% passes
  • Advanced quizPro80% passes
  • Terms

Accounting for the acquirer

0
of 7 lessons
0
of 16 cards
FlashcardsStart the first lesson

What a deal does to the buyer's balance sheet, income statement, and tax bill, from the day it closes to the impairment test three years later.

BBasic3 lessons

  1. 1How a deal lands on the buyer's statementsOn closing day the buyer's balance sheet absorbs the target's assets and liabilities, the target's equity disappears, and whatever the buyer paid shows up as cash out, new debt, or new shares.9 min
  2. 2Purchase price allocation and goodwillProThe buyer marks the target's assets and liabilities to fair value, recognizes intangibles the target never booked, and calls whatever is left goodwill.10 min
  3. 3From headline price to cash at closingProDeals are agreed on an enterprise value, but the seller is paid an equity value that moves with debt, cash, and working capital on the closing date.8 min
  4. QBasic quizPro9 questions, 80% passes

AAdvanced4 lessons

  1. 4Taxes in a deal: stock versus assetProWhether the buyer buys shares or assets decides whether it gets a stepped-up tax basis, and that tax shield can be worth a real share of the price.11 min
  2. 5Earnings after the dealProPurchase accounting changes what the combined company reports for years: amortization of new intangibles, the inventory step-up, and a separate set of adjusted numbers that management asks investors to watch.10 min
  3. 6How much you own decides the accountingProA 10% stake, a 35% stake, and a 70% stake in the same company show up three completely different ways, and moving between them can create a gain on paper.9 min
  4. 7Earnouts and goodwill impairmentProTwo places where the accounting surprises people: an earnout can make a great quarter look bad, and an impairment is the public record of having paid too much.9 min
  5. QAdvanced quizPro10 questions, 80% passes