TITLE

The LBO: Accounting and Financial Reporting Implications

AUTHOR(S)
Smith, S. Curtis
PUB. DATE
May 1985
SOURCE
FE: The Magazine for Financial Executives;May1985, Vol. 1 Issue 5, p48
SOURCE TYPE
Trade Publication
DOC. TYPE
Article
ABSTRACT
The article presents an overview of accounting and financial reporting implications of leveraged buyouts (LBOs). The article states that the real accounting and financial reporting issues are caused by Accounting Principles Board Opinion No. 16, "Business Combinations." A cursory reading of the purchase accounting methodology outlined in APB No. 16 will lead to the erroneous conclusion that it is relatively easy. For example, existing goodwill and deferred taxes should disappear. The financial reporting aspects of an LBO can be complicated by more than APB No. 16. An LBO immediately marks the beginning of a new fiscal period. It will split the current reporting period in two, and probably require an additional tax return as well.
ACCESSION #
15096047

 

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