#mergers-and-acquisitions
Accounting guidance for business acquisitions, goodwill, purchase price allocation, and deal structuring
Stripe and Advent International offered $60.50 a share — about $53.4 billion — to buy PayPal, a deal that would merge processors handling $3.7 trillion in annual volume. History shows consolidation like Global Payments-Worldpay raised merchant costs through padded fees, so here are four concrete steps to protect your processing costs now.
On July 13, 2026, the FTC and DOJ obtained a record $12 million civil penalty from Edwards Lifesciences and Genesis MedTech for structuring a $115 million acquisition with a $25 million non-voting side investment to stay under the Hart-Scott-Rodino filing threshold. This guide explains the 2026 HSR thresholds — $133.9 million size-of-transaction and the size-of-person test — and why roll-ups, PE-backed platforms, and deals structured to "just miss" the line carry real filing risk.
Most letters of intent are labeled non-binding, but exclusivity, confidentiality, and break-up-fee clauses inside them are typically enforceable. This guide covers LOI terms in sub-$10M business sales — asset vs. stock structure, 30–90 day exclusivity windows, working capital true-ups, price allocation, and the mistakes that cost sellers deals.
Software acquired as part of buying a business amortizes over 15 years under IRC Section 197 — not the 36 months standalone software gets. How to allocate a micro-SaaS purchase price across the seven IRS asset classes, agree on Form 8594 with your seller, and record it in a plain-text ledger.
Under ASC 958-805, a combination of two nonprofits must be classified as either a merger, which uses the carryover method with no fair-value remeasurement or goodwill, or an acquisition, which requires fair-value remeasurement and an immediate expense instead of capitalized goodwill for any excess consideration.
Broadcom's FY2025: $63.9B revenue (+23.9%) and GAAP net income of $23.1B, up 292% from $5.9B — but decomposing the $17.2B swing shows revenue growth explains only 72% of it, with roughly $4.8B coming from a tax provision flipping to a $397M benefit plus one-time restructuring and discontinued-operations reversals. The durable signals are Infrastructure Software's operating margin rebounding to 76.8%, above its pre-VMware baseline, and AI semiconductor revenue guided to roughly double to $8.2B. Rebuilt line by line in a public Beancount ledger, FY2021–FY2025.
Capital One's $5.15 billion acquisition of Brex, which closed in April 2026, adds integration and roadmap uncertainty to a corporate card market that also includes Ramp, BILL Spend & Expense, and Aspire, so small businesses now need to weigh vendor stability alongside features and pricing.
Section 1059 reduces a corporate shareholder's stock basis by the nontaxed portion of an extraordinary dividend — 5% threshold for preferred, 10% for common — when received within two years of acquisition, with excess immediately taxed as capital gain. This guide covers the thresholds, the 85-day and 365-day aggregation rules, the FMV election, the non-pro-rata redemption exceptions, and the lot-level bookkeeping that keeps corporate finance teams out of audit trouble.
A practical walkthrough of the Section 368(a)(1)(F) reorganization — the six regulatory requirements, the six-step Rev. Rul. 2008-18 choreography, why PE buyers prefer it to a 338(h)(10) election, and how it preserves the operating EIN while giving the buyer asset-basis step-up and the seller tax-deferred rollover equity.
How the net working capital peg and post-closing true-up quietly transfer cash from sellers to buyers in mid-market M&A, and the monthly accrual-basis bookkeeping discipline that protects sale price.
A Quality of Earnings (QoE) report decides whether a buyer accepts your EBITDA or re-trades the deal price. This guide breaks down the 12 add-backs buyers accept, the 8 they reject, and how the working capital peg quietly cuts seller proceeds at closing.
Section 7874 imposes a 10-year inversion-gain floor when former U.S. shareholders own 60-80% of a new foreign parent and reclassifies the parent as a domestic corporation at 80%. The only escape is the substantial business activities safe harbor, which requires clearing a 25% bright-line threshold on employees, tangible assets, and gross income in the foreign country.
