Business combinations

Accounting for a deal

Even seemingly straightforward M&A transactions can introduce complex accounting issues. Some examples include accounting for non-controlling interest, fair value step-ups, put/call options, pre-existing relationships, fair value of  assets and liabilities and treatment of potential GAAP differences.

Early consideration of such matters can help optimizing the deal structure and limit complexity in deal execution and post deal accounting.

What impacts should a company consider?

  • Deals accounting may impact on post-acquisition earnings in instances with earn-outs, significant fair value adjustments or GAAP differences. Early identification of such matters will prevent surprises later on in the deal process.
  • Companies need to early consider the CGUs to which goodwill will be allocated and understand where future impairment risks may arise to make informed decisions in the PPA.
  • Buyer’s and seller’s accounting policies need alignment even tough these may be reporting under the same GAAP. A thorough analysis during the purchase price allocation will ease the subsequent integration and external audit.
  • Complex valuation techniques are often required for acquired contracts, intangibles, contingent consideration (i.e., earn-outs) and other assets and liabilities that are difficult to value.

How can PwC help?

Business combination accounting is challenging as it requires knowledge of accounting, valuation and understanding the underlying transaction mechanisms.  We have an integrated team available, consisting of structuring, accounting and valuations experts to advise and assist you on and deal.

Here are a few of the services we can help you with:

  • Structuring advice to optimize deal structure from an accounting, legal and tax perspective.
  • Technical accounting advice on application of IFRS, Dutch GAAP and US GAAP deals accounting standards on your transaction.
  • Execution of purchase price allocations including valuation of net assets acquired and accounting implications.
  • GAAP alignment and conversions.


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Contact us

Alexander Spek

Alexander Spek

Partner, PwC Netherlands

Tel: +31 (0)88 792 00 02

Patrick Theune

Patrick Theune

Partner, PwC Netherlands

Tel: +31 (0)61 089 63 03

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