Purchase Price Accounting (PPA) can provide a small but fairly accurate lens into management’s principles. Such accounting policies typically fly under the radar as companies direct investors to EPS or EBITA. PPA can set apart conservative and aggressive companies; those with an eye to massage EPS versus those with rigor. It can also help explain a company’s operational philosophy; the synergies and value-add the parent believes it can add post-acquisition.
We share our learnings from multiple conversations about acquisition accounting with public company CFO’s of software and industrial serial acquirers over the last month. We discuss the methodologies of companies such as Lifco, Teqnion, Lagercrantz and software acquirers such as Constellation, Vitec, and Visma.
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