Supporting a Merger with Technical Accounting
The Challenge
Multiple providers of eye and vision care services were combined into one entity. They turned to Accordion for assistance with entity accounting related to pre-close reorganization. Additionally, our team was asked to help prepare a Closing and Opening Balance Sheet. This included proposing the necessary Closing Balance Sheet accounting entries, determining purchase price allocation and related journal entries, overseeing the recording of entries in the accounting ledger, and liaising with third party valuation firms and auditors.
Services
Financial Statement Preparation & Analysis
The Execution
Supported pre-close re-organization:
- Reviewed Restructuring Agreements, Contribution Agreements, and Management Service Agreements between entities to gain understanding of each agreements’ terms
- Prepared management’s schedule of adjustments to identify and properly record the non-clinical assets, liabilities, and expenses to the appropriate management company
- Provided oversight and accounting support to management throughout the pre-close reorganization process
Assisted with preparation of an acquisition company stub period tax return with push down of consolidation entries to the correct legal entities for pre-acquisition activity:
- Rolled forward operating activity through date of transaction
- Identified and properly adjusted pre-close transactions (sale-leaseback, SERP settlement, etc.)
Prepared closing and opening balance sheet:
- Liaised with third-party valuation firm for final intangible asset and long-lived asset valuations for the acquired entities
- Proposed necessary accounting entries based on valuations and details provided by the Company in relation to the net working capital balances
- Oversaw recording of the entries in the financial ledgers
Supported balance sheet audit:
- Prepared documentation of Balance Sheet adjustments as audit back up
- Supported Company through the external auditor review
The Results
Working closely with the company, Accordion was able to help steer the accounting processes of a pre-close re-organization by aligning the contribution of clinical and non-clinical items across legal entities to conform to the restructuring agreements. Our team developed the journal entries to adjust the balance sheets of all entities, reflect third-party valuations and net working capital adjustments, including writing the technical memo to support the documentation of the purchase price allocations. Finally, we prepared a consolidated Closing and Opening Balance Sheet and prepared/supported the Company through the auditor’s review of the transaction.