-Adjusted EBITDA is EBITDA excluding the impact of the fair value
acquisition accounting adjustment on acquired deferred revenue, acquisition-related costs, gain on disposition of non-core assets, stock-based compensation expense, restructuring charges, and litigation-related expense.
Then the deal is closed, and the torch is passed to finance to do the
acquisition accounting," McGahan said.
Table 1 summarizes the implications of accounting for taxes, and Tables 2 and 3 show examples of proper
acquisition accounting.
Recording an EBITDA margin of 16.3% and EBIT margin of 11.2%, the Group achieved for the fourth consecutive year of an EBITDA margin exceeding 15% and a double-digit EBIT-margin, even after absorbing the one- time integration and
acquisition accounting effects from the Metco transaction.
There were declines in several asset quality ratios, including nonperforming assets to total loans, accruing loans past due 90 days or more to total loans, allowance to total loans, and allowance to total loans, adjusted for
acquisition accounting, while the coverage ratio of allowance to nonaccrual loans remained high, it said.
In an attempt to pervade full fair values into business
acquisition accounting, US-FASB issued SFAS 141(R) and 160 during 2008.
The comparability of current and prior-year financial statements has been impacted by the application of
acquisition accounting and changes in the company's capital structure resulting from the merger.
The comparable net result for 2010 is adjusted for non-cash, non-taxable income of DKK598m under special items related to new
acquisition accounting regulation, Carlsberg said in its report for the first quarter of 2011.
In Step 2, the RU's fair value is allocated to its assets and liabilities following
acquisition accounting procedures to determine the implied fair value of goodwill.
It started with accounting for takeovers, prompted by the realisation that firms using the merger method were stealing a march on those using
acquisition accounting. Next it touched property revaluations, finance leases, pensions and accounting for oil and gas companies' decommissioning costs.
In such instances, the acquisition date and the
acquisition accounting required thereby results from a transaction in which the acquirer did not directly participate.
The "gray zone" comprises such techniques as: shipment acceleration (sometimes known as "channel stuffing"); swapping equity for revenue; creative
acquisition accounting; the lowering of reserves for merchandise likely to be returned; bill-and-hold arrangements (often with side letters guaranteeing the right to return goods); the raising of pension fund return assumptions; and "round tripping" of revenue between companies.
