M & A disputes : a professional guide to accounting arbitrations / A. Vincent Biemans, Gerald M. Hansen.

Format:

Book

Author/Creator:

Biemans, A. Vincent, 1977- author.

Hansen, Gerald M., 1967- author.

Series:

Wiley finance series.

Wiley Finance Series

Language:

English

Subjects (All):

Consolidation and merger of corporations--Accounting.

Consolidation and merger of corporations.

Arbitration (Administrative law).

Physical Description:

1 online resource.

Edition:

1st ed.

Place of Publication:

Hoboken, New Jersey : Wiley, 2017.

Summary:

Navigate M&A accounting arbitrations with insider perspective M&A Disputes takes you inside the dispute resolution process to help you put together the many "moving parts" necessary to obtain a successful outcome. With deep insight from experts in the field-including valuable advice from the arbitrator's perspective-this book guides you through the entire process to explore the variables at work. The high volume of M&A transactions makes post-closing price adjustment provisions and accounting arbitrations a critical part of doing business. Yet, the field is opaque to non-practitioners and important issues can be easily misunderstood without specific knowledge and experience. A resulting award can make or break a transaction; an intimate understanding of the process's inner working can help you plan your position to the greatest advantage. This book explores the many factors that that contribute to a successful resolution across the entire transaction life cycle from contract negotiation through the dispute phase including due diligence, determination of the target net working capital, conception and closing of the purchase agreement, post-closing negotiation and dispute resolution, the impact of accounting practices, guidance, and documentation as well as relevant auditing concepts, and various facts and circumstances surrounding the target business and the transaction that need to be considered. M&A volume remains high and continues to result in large numbers of current and future post-closing M&A disputes. Clients rely on their attorneys and advisers to guide them through the process and counsel them toward a positive outcome. Those professionals will find that M&A accounting arbitrations carry a range of distinctions that require a specialized knowledge base to navigate correctly. This book provides real-world guidance from experts in the field, with invaluable insight for every stage of the process. * Walk through the entire dispute resolution process from arbitrator selection through final award * Understand how M&A agreement provisions impact the awarded amount as well as the options available to limit the scope of potential disputes and the "gaming" of the post-closing process by the counterparty * Understand the nature of accounting estimates and guidance, their interaction with accounting arbitrations, and how to synthesize facts, circumstances, and GAAP into a persuasive argument to present to the accounting arbitrator * Get situation-specific advice for different types of transactions * Learn practitioner "dos" and "don'ts" from the arbitrator's perspective M&A Disputes provides transaction parties and their representatives an inside view at the transaction and commonly disputed items through the eyes of the arbitrator to provide them with uniquely valuable insight. In addition to being an invaluable tool for practitioners appearing before an accounting arbitrator, M&A Disputes also provides advice to would-be and experienced arbitrators alike to successfully resolve disputes that can be significant and complex.

Contents:

Cover

Title Page

Copyright

Contents

Preface

Acknowledgments

About the Authors

Part One: The M&amp

A Dispute Framework

Chapter 1: Introduction to M&amp

A Disputes

The Transaction Lifecycle

Categories of Purchase Price Adjustment Provisions

Accounting Arbitrations versus Expert Determinations

Overview of the Book

Note

Chapter 2: The Post-Closing Adjustment and Dispute Process

From Closing to Dispute

The Dispute Resolution Process

Chapter 3: Post-Closing Net Working Capital Adjustments

Net Working Capital Estimation and Adjustment

An Approach to Defining and Quantifying Net Working Capital

The Demarcation and Quantification of Net Working Capital

Notes

Part Two: Core Concepts and Issues

Chapter 4: The Nature of GAAP

Background of GAAP

GAAP Is Not Necessarily Narrowly Prescriptive

GAAP Is Not a Free-for-All

GAAP by Itself Is Too Broad for Closing Date Accounting in Many Situations

Chapter 5: Past Practices in Accordance with GAAP

Past Practices in Accordance with GAAP Does Not Necessarily Narrow Down the Applicable Accounting to a Single Point Estimate for All Accounts under All Circumstances

Complications of Utilizing Past Practices

Past Practices Would Violate GAAP

Consequences of the Application of Past Practices Being in Contravention of GAAP

Procedural Mitigation of Multiple Potential Outcomes

Chapter 6: Target Net Working Capital

Approaches to Determining the Target Net Working Capital

Considerations in Determining Target Net Working Capital

Consequences of Discrepancies

Chapter 7: Transaction-Specific Adjustments

Potential Candidates for Special Treatment

Considerations in Implementing Custom Provisions

Chapter 8: Audited Financial Statements and Auditing Concepts.

The Audit of Financial Statements

Relevance of an Audit and Audited Financial Statements in an Accounting Arbitration

Limitations on the Relevance of a Financial Statement Audit in an Accounting Arbitration

The Concept of Professional Skepticism

Chapter 9: Subsequent Events, New Positions, and New Information

Subsequent Events

Procedural Deadlines for New Positions and New Information

Part Three: The Accounting Arbitration

Chapter 10: Mitigation of Post-Closing Purchase Price Disputes

Due Diligence

Documentation of Past Accounting Practices Is Critical

The Pre-Closing and Post-Closing Teams

Negotiation of Disputed Items Prior to the Accounting Arbitration

Chapter 11: Selection and Retention of an Accounting Arbitrator

Terms of the Purchase Agreement

Consideration of the Qualifications of the Accounting Arbitrator

Engagement of the Accounting Arbitrator

Chapter 12: The Parties' Initial Submissions

Introduction to the Initial Submissions

Background of the Transaction and the Dispute

Unique Accounting or Industry Considerations

Discussion of Individual Disputed Items

Supporting Documentation

References to Authoritative Guidance

Give the Arbitrator Options

Conclusion

Chapter 13: Further Submissions, Proceedings, and Considerations

Rebuttal Submissions

Expert Reports and Affidavits

Interrogatories and Document Requests

Hearings

Chapter 14: The Arbitration Award

Professional Standards

Applicable Agreements

Consideration of Submitted Information

Independence and Impartiality

Resolve All Disputed Items

The Weight Given to Evidence Provided

Allocation of the Fees and Expenses of the Accounting Arbitrator

Types of Arbitration Awards

Part Four: The Disputed Items

Chapter 15: Overview of Disputed Items.

Net Working Capital under GAAP

Common Drivers of Disputed Items

The Impact of Other Circumstances

Miscellaneous Disputed Items

Chapter 16: Inventory

GAAP Guidance Related to Inventory

Buyers and Sellers Can Have Differing Views Regarding the Value of Inventory

Disputed Items Related to Inventory

Presenting and Resolving Inventory-Related Disputed Items in an Accounting Arbitration

Resolving Inventory-Related Disputed Items

Chapter 17: Accounts Receivable

GAAP Guidance Related to Accounts Receivable

Buyer's and Seller's Differing Views Regarding Collectability

Accounts Receivable Disputed Items

Presenting and Resolving Net Accounts Receivable Disputed Items in an Accounting Arbitration

Chapter 18: Contingent Liabilities

The Potential Impact of Subsequent Events on Contingencies

Litigation Accruals

Warranty Accruals

Contingent Tax Exposure

Potential Mitigation of Certain Contingent Liabilities

Chapter 19: Revenue Recognition and Expense Accruals

Revenue Recognition

Vacation and Other Payroll Accruals

Bonus Accruals

Tax Accruals

Prepaid Expenses

Part Five: Other Topics

Chapter 20: Governing Agreements and Contractual Choices

Past Practices in Accordance with GAAP

Transaction-Specific Treatment

Procedural Choices

Chapter 21: Interaction with Indemnification Provisions

Indemnification Provisions

Representations and Warranties

The Net Working Capital Adjustment Process Can Overlap with Indemnification Provisions

The Combination of Net Working Capital and Indemnification Provisions Can Lead to a Windfall

Excluding Indemnifiable Items from the Net Working Capital Calculation

Chapter 22: Other Mechanisms, Earn-Outs, and Locked Boxes

Pre-Closing EBIT/EBITDA Adjustments and Disputes.

Earn-Out Adjustments and Disputes

Adjustment Mechanisms Related to Capital Expenditures

The Locked Box: An Alternative to Post-Closing Adjustments?

Transaction Fraud

Chapter 23: International Considerations

U.S. GAAP, IFRS, and Local GAAP

Differences in Legal Systems

Other Considerations

Index

EULA.

Notes:

Includes index.

Includes bibliographical references at the end of each chapters and index.

Description based on print version record.

ISBN:

9781119331940

1119331943

9781119331933

1119331935

9781119331926

1119331927

OCLC:

978712958