The Dark Side of Financial Reporting Adjustments: Mergers, Acquisitions and Roll-Ups


By Joel Litman, Sandra J. Peters, and Zach Gast

Chief Investment Strategist of Valens Equities and Credit, Head of Financial Reporting Policy Group - CFA Institute, and Director of Research for the Center for Financial Research and Analysis

Date

Thursday, 14th April 2016

Schedule

12:00 PM – Start of Program
2:00 PM – End of Program

Location

NYSSA Conference Center
1540 Broadway Suite #1010 New York, NY 10036

Language: English

Generally GAAP does a very good job of representing the underlying business. However GAAP allows significant  discretion and managers have to exercise their judgement while preparing financial statements. Context is important to understand accounting, e.g., new CEO of a previously struggling business has incentives to make the company look better or a company, that knows most of its shareholder base are value investors, has incentives to show growing cash flows. In many businesses, managers feel that GAAP does not represent the business reality so they present pro forma numbers in their reporting.

The GAAP and pro forma numbers we see in the financial reports are from manager’s perspective. However, any business has several stakeholders: shareholders, creditors, managers, employees, suppliers, customers etc. and each of these stakeholders are operating their own business so they need to adjust the reporting provided by GAAP and management to suit their own business reality. In this panel discussion, you will hear from leading minds in investment management and accounting where we will focus on the financial reporting adjustments in mergers and acquisitions and their appropriateness in valuing acquisitive companies.

 

After this event, you will be able to:

  • Improve financial analysis of companies engaged in acquisition-centered strategies
  • Assess management adjustments to GAAP results for appropriateness in valuing acquisitive companies
  • Identify areas involving management judgement and discretion in acquisitions

Who should attend?

Analysts, Portfolio Managers, Investment Banking Analysts