How does a PP&E step-up work in PPA, and what is the P&L impact?

A PP&E step-up increases the acquired fixed assets from book value to fair value. The step-up is depreciated over the remaining useful life, creating incremental D&A after closing. It reduces EBIT and net income but not EBITDA. In a stock deal, the accounting step-up often has no tax basis step-up, so a deferred tax liability is recognized.