Negotiations for the takeover of a company was to change all arrangements with banks and registrations. The new parent company will not be consolidating their accounts for the year ended 31 December the next year but merely including it as a purchase. This provided a small window of opportunity between the takeover date and the year end, to adjust profitability by taking a pessimistic view.
The Financial Director (FD) had also sought advice from their auditors but wanted objective input regarding what might be allowable.
We discussed with the FD his ideas so far, reviewed the report from the auditors, reviewed accounting standards for relevant and appropriate requirements and guidance, formulated specific applications and reported on the findings to meet the requirements.
The project revealed a number of areas where additional provisions or a change to their previous accounting policies may be appropriate. They were very pleased with the outcome and is likely to want further work from us when the deal has been completed.