Long form heading for insights articles
Business Services • Financial Reporting and Audit Support • Financial Services
Following significant structural changes and the acquisition of an overseas company, this case study outlines how we supported a US-based global private equity client with their group financial reporting under IFRS.
About our client
Our client is a US-based global private equity firm with a UK holding company that manages various investments. Over the past 12 months, the UK entity has undergone significant structural changes, including the disposal of a long-held subsidiary and the acquisition of an overseas trading company. With the financial year-end having passed, the client needed to prepare audited group financial statements while ensuring compliance with UK-adopted IFRS.
How we helped
Our team provided end-to-end support in preparing consolidation workings, group financial statements, and liaising with auditors throughout the process. Given the complexities of both the disposal and acquisition transactions, our approach was meticulous and proactive, ensuring a seamless financial reporting process.
Accounting for the disposal
One of the key challenges was accounting for the disposal of a subsidiary that had been held for many years. Disposals of long-held investments often involve complex deconsolidation adjustments, particularly in calculating the profit or loss on disposal, derecognition of assets and liabilities, and reclassification of historical reserves.
Beyond the technical consolidation process, extensive disclosures were required in the financial statements, outlining the financial impact, strategic rationale, and key financial movements arising from the disposal.
Accounting for the acquisition
During the year, the client also completed a new business acquisition, requiring compliance with IFRS 3 - Business Combinations. Following the acquisition, the client commissioned a Purchase Price Allocation (PPA) report, a critical step in determining the fair value of consideration transferred, identifiable net assets acquired, and goodwill recognised.
We assisted in:
Interpreting the PPA report to determine appropriate accounting entries,