Accounting 582: Accounting for M&A

ACCOUNTING 582: ACCOUNTING FOR M&A

Course Description (first half-GAAP accounting, taught by Robert Trezevant)

Briefly stated, the goal of this half of the course is to learn how the financial accounting reports are impacted by the financial accounting rules that are used to account for mergers and acquisitions. The practical value of this course is that the skills acquired are extremely valuable for (i) auditors who must audit this information; (ii) tax accountants who must understand the operating, investing, and financing strategies of a firm to offer tax advice; (iii) corporate accountants who must prepare this information; (iv) any internship or full-time job requiring the analysis of proposed and/or completed mergers and acquisitions; and (v) any internship or full-time job requiring the analysis of financial information that is typically drawn from a firm’s financial statements, if a merger or acquisition is included in the financial data.

Course Description (second half-tax accounting, taught by Shiing-wu Wang)

The second half of Acct 582 focuses on income tax issues in corporate restructuring activities. We will first introduce the concept of efficient tax planning: all-party approach, explicit and implicit tax, and non-tax costs in tax planning. This is followed by an overview of tax effects of important corporate restructuring activities including business combination (M&A), divisive restructuring, asset sell-offs, equity carve-outs, stock buybacks, etc. The remaining part of the course will provide detailed analyses of the effect of taxes on all parties in corporate restructuring activities. In particular, the role and effect of taxes on asset valuation will be explored. Cases will be used to expose students to how the structure of a transaction is chosen and how the selected structure affects acquisition prices. By the end of the course, students will be able to understand the following major issues related to taxes and corporate restructuring strategy.

·  Efficient tax planning and its implications.

·  The role of income tax in corporate restructuring activities including M&A, divestitures, distributions, stock buybacks and its effect on all parties involved.

·  Income tax and the choice of the structure in corporate restructuring activities such as mergers and acquisitions and divestitures.

·  The effect of choice of transaction structure in M&A and divestitures on the price of the deal (the valuation issue).