IPOs are an exciting time in the lifecycle of a company. It is an acknowledgement by the markets of the company’s past success, future prospects and validation of management. It can provide liquidity to fund strategic initiatives, modify a company’s capital structure and provide currency to reward and incentivize key personnel. Getting there is a long and challenging process and once public, there is a long list of new demands on an organization. We can assist you in evaluating your readiness to become a publicly traded company, preparing a registration statement and planning for the day one requirements of being a listed business.
Companies often divest of non-core businesses or spin-off businesses to enhance overall shareholder value. Divestitures may result in sale of part of the business or shareholders obtaining an ownership interest in a separate entity. Doing so, however, raises a number of unanticipated issues for the seller. Depending on the potential buyer, the sale of a business may necessitate presentation of audited financial statements which historically may not have been issued. Another complexity is if the sale does not represent a separate legal entity, but perhaps a division, group of assets or something less. The buyer still may require audited financial statements which comply with unique accounting rules. A foreign buyer may require the financial statements to be presented on a basis other than US GAAP (e.g., IFRS).
Strategic acquisitions can be critical to the long-term success of a business. An acquisition brings a host of challenges in order to realize the anticipated benefits. Depending on the consideration exchanged in an acquisition, the acquirer may be required to file a proxy statement. We can assist you in both pre and post acquisition activities which includes accounting and reporting for an acquisition and advising you on the post merger integration considerations.
The proliferation of accounting rules and interpretations makes it challenging for the best of accounting departments to stay current. Unfortunately, compliance with such rules is not discretionary and your auditors may not be able to provide guidance at a level that would ultimately have them auditing their own work. We can provide you with whitepaper memos to support your analysis and conclusions, assist you in quantifying any necessary adjustments, and assist you through the audit process by working closely with your auditors. As part of their review of annual reports, the SEC may ask certain questions related to accounting and disclosure through its comment letter process. We can assist in drafting or reviewing your responses to SEC comment letters.
We understand that there are times where a temporary resource is required to backfill a position or to fill a position until a permanent resource is identified and hired. We are able to provide temporary management level resources such as a CFO, Controller, Chief Accounting Officer, or Director of External Reporting.
Companies that seek financing outside the US may be required to prepare financial statements under IFRS. This is no small undertaking and may have significant implications to a business beyond its accounting and finance department. Additionally, as IFRS is not widely used by companies in the US, there is a shortage of trained and experienced IFRS resources in the US.
A company may enter into a plan of reorganization to restructure its obligations with creditors and enable it to have better opportunity to be successful in the future. Companies that emerge from Chapter 11 bankruptcy may trigger “fresh start” accounting rules which effectively follow the acquisition method of accounting. There are also special disclosure requirements.
Accounting standards can be complicated and errors unfortunately happen. While restatements are certainly not expected, the way in which a company responds is critical. Executing a thoughtful plan is critical to restoring shareholder value and confidence in management. Companies may be subject to delisting proceedings or may have obligations accelerated. Restatements may involve regulatory scrutiny, litigation and other investigations.