Module V· Pro-Forma Combined FinancialsAdvanced
Question

How does the combined balance sheet look after a 1,000 acquisition with step-ups, DTL, and NCI?

Answer

The combined balance sheet starts with buyer and target balance sheets, then applies transaction accounting: cash paid / financing raised, target debt refinanced if applicable, target equity eliminated, identifiable assets stepped up, deferred tax liability recorded on non-tax-deductible step-ups, NCI recorded if less than 100% is acquired, and goodwill as the plug. The balance sheet must balance after all adjustments.