Accounting for Mergers and Acquisitions: Foundations

This course aims at assisting you in interpreting financial accounting information related to inter-corporate investments. The course will cover three main topics over four modules: (i) accounting for passive, significant influence, and control type of inter-corporate investments, (ii) special issues and considerations in inter-corporate investments, and (iii) special types of inter-corporate investments. The course will be useful for students to understand complex organizational structures through the lens of financial accounting information and will benefit investors, analysts, bankers, consultants, managers, and any deal-makers.

• Course Orientation
• Introduction to Inter-Corporate Investments
• Mergers, acquisitions, and other complex transactions (e.g., spin-offs, carve-outs, leveraged buyouts, and recapitalizations) drastically alter firms’ financial statements. In this module, you will explore main types of equity investments and learn accounting for passive and significant type of investments.
• Control Type of Investments
• Investments between 50% and 100% give the acquirer firm control over the target firm for all operational and financial decisions of the target firm. These investments are accounted for using consolidation. In this module, you will explore accounting for consolidation
• Special Considerations in Inter-Corporate Investment
• There are various special issues in mergers and acquisitions. In this module, you will explore some common special considerations in mergers and acquisitions including definition of business, identifying the acquirer firm, bargain purchase, acquisition related costs, and earnouts.
• Module 4: Special Types of Acquisitions
• There are various ways to conduct mergers and acquisitions. In this module, you will explore reverse acquisitions, step acquisitions, and accounting for deconsolidations.