The complexity and importance of accounting for divestitures cannot be overstated given the many challenges involved along with the focus of the SEC.
Corporate divestitures have characteristics that differentiate them from other merger and acquisition (M&A) transactions.
For example, prior to sale execution, the sold entity’s infrastructure must be separated from the seller as the sale price announcement can cause potential instability.
Required for successful divestiture accounting is a structured approach that includes planning, preparation and disciplined execution.
Reviewed in the full PDF…
…is a review of how accounting for divestitures must address four specific challenges, as well as how failure to do so can generate three potential negative impacts.
Los Angeles and Southern California executives contemplating a transaction that includes a divestiture can benefit from talking with a CFO services professional who is well-versed in divestiture accounting technical expertise, potential pitfalls, and divestiture documents.