What accounting changes does an analyst account for in working out accretion/dilution analysis?



Accounting changes adjustments include:

• Non-cash related items which include incremental D&A, asset write ups, write down: Targets Fixed and intangible assets are written up to fair value


• This typically leads to higher amortisation and depreciation expense in the future for the acquiring company.


• Reduces Proforma (combined) NI and Proforma EPS.


• Creation of goodwill can be the most significant adjustment. May not have an immediate impact on the Income Statement in the short-term.


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