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Supplying Purchase Price Allocation and Technical Accounting Support for a Cashless Acquisition
A provider of software supply chain solutions was expanding its footprint through the acquisition of another software company. However, this particular transaction presented unique accounting challenges; unlike prior deals, it was structured as a cashless acquisition. The client needed help understanding how to account for this atypical transaction, including fair value measurement of the net assets acquired, as well as technical deliverables like a formal accounting memo, opening journal entries and full balance sheet setup.
We provided trusted valuation expertise to determine the fair value of the net assets acquired. At the same time, our technical accounting team reviewed the structure and financial terms of the transaction to ensure proper accounting treatment.
We delivered the full suite of deliverables required for financial reporting, including journal entries, an opening balance sheet and the necessary business combination disclosures. As part of our work, we also supported the client in accounting for a rare gain on bargain purchase—an unusual outcome that required additional education and walkthroughs with the finance team to ensure complete understanding and documentation.
The client successfully recorded the acquisition with confidence and accuracy, backed by the detailed support and documentation we provided. Given that stock options were included in the consideration, we also ensured this element was appropriately tied into their existing stock compensation accounting.
Our team’s ability to explain and document the uncommon bargain purchase gain proved especially valuable, equipping the client with audit-ready workpapers and the knowledge to support the treatment with internal and external stakeholders.