Acquisition Closing Checklist by YNx0bnF

VIEWS: 216 PAGES: 7

									                       Acquisition Closing Checklist


                                                                                           Prepared By: ______________
                                                                                           Approved By: ______________
                                                                                           Revision Date: ______________
                                                                                           Effective Date: ______________

PURPOSE:
This document should be used to document the activities performed as part of the acquisitions/new business development
process by ABC, Inc. and all subsidiaries.
                                                                            Acquisition Closing Checklist


Table of Contents                                                                                                                                                                            Page

1.   Pre-Acquisition Activities ................................................................................................................................................................................. 3
     1.1         Hold an Acquisition/Integration Steering Committee ............................................................................................................................................ 3
     1.2         Develop a Communication Strategy ........................................................................................................................................................................ 3
     1.3         Create an Acquisition Planning document ............................................................................................................................................................. 3
     1.4         Prioritize Acquistion/Integration Issues and Concerns ......................................................................................................................................... 4
     1.5         Review Systems and Integration Requirements ................................................................................................................................................... 4
     1.6         Assess Financial Reporting & Accounting Considerations .................................................................................................................................. 4
     1.7         Determine if Acquisition meets Rule 3.05 of Regulation S-X Requirements .................................................................................................... 4
     1.8         Obtain Board of Directors approval ......................................................................................................................................................................... 4
     1.9         Review Expenditures related to acquisition and integration activities ................................................................................................................ 5
2.   Perform Due Diligence ......................................................................................................................................................................................... 5
     2.1         Perform Balance Sheet Confirmation...................................................................................................................................................................... 5
     2.2         Evaluation of Current Capital Projects .................................................................................................................................................................... 5
     2.3         Address Legal Concerns ........................................................................................................................................................................................... 5
     2.4         Review Material Contract Obligations ..................................................................................................................................................................... 5
     2.5         Preparation and Review of Tangible Asset Valuation .......................................................................................................................................... 5
     2.6         Review Insurance Matters ........................................................................................................................................................................................ 5
     2.7         Tax Considerations for Foreign Entities.................................................................................................................................................................. 5
     2.8         Review Differences in Accounting Treatment ........................................................................................................................................................ 5
     2.9         Review of Acquisition Valuation by appropriate individuals ................................................................................................................................. 6
3.   Post Acquisition Activities .............................................................................................................................................................................. 6
     3.1         Prepare of Purchase Accounting Entries ................................................................................................................................................................ 6
     3.2         Review Purchasing Accounting Entries .................................................................................................................................................................. 6
     3.3         Assessment of Intangible Assets ............................................................................................................................................................................. 6
     3.4         File Acquisition’s Financial Statements with SEC ................................................................................................................................................. 6
     3.5         Review of Adjustments to Financial Statements ................................................................................................................................................... 6
4.   Management Approval ......................................................................................................................................................................................... 7




Source: www.knowledgeleader.com                                                                                                                                                                            Page 2
                                                    Acquisition Closing Checklist
Acquisition Activity
  Tasks to be completed for each Activity
        Details of each task
                                                                                                                                Task
                                                                                                                              Completed?      Date


1. Pre-Acquisition Activities                                                                                                  Y / N /A
1.1     Hold an Acquisition/Integration Steering Committee                                                                         Y / N /A
The Acquisition/Integration Steering Committee should involve members of Corporate Accounting Department, Corporate Legal Department, IT
Department, Operations and Executive Management. The Committee’s Duties should include, but are not limited to:
    Select an acquisition/integration coordinator who will report directly to the (insert position title). This individual will be responsible for
       planning the work, organizing the project teams, and ensuring the tasks noted in this checklist are properly executed.
    Appoint individuals responsible for completing subsequent tasks
    Review overall acquisition/integration status
    Approve major policy/procedure changes
    Act as a sounding board for integration assumptions/conclusions


1.2     Develop a Communication Strategy                                                                                       Y / N /A
The communication strategy should take account of the following:
    Evaluate major objectives
          Communicate ideas, status or information
          Support long-term commitment
          Minimize uncertainty
    Determine distribution guidelines
    Determine delivery mechanisms
    Decide upon frequency and release dates of communications
          Need to determine the ideal frequency and length of communications
    Develop a method for feedback and subsequent resolution
          Concerns and issues should be captured and acted upon in a timely fashion
    Review the communication plan with Management
1.3     Create an Acquisition Planning document                                                                                Y / N /A
The Acquisition Planning document should include, but not limited to, the following elements:
    Detail the objectives of the acquisition and how the acquisition supports corporate goals and objectives
    Evaluate benefits of the Acquisition
    Examine potential risks
    Determine the acquisition/integration committee's role
    Draft an integration work plan




Source: www.knowledgeleader.com                                                                                                      Page 3
                                                  Acquisition Closing Checklist
Acquisition Activity
  Tasks to be completed for each Activity
        Details of each task
                                                                                                                             Task
                                                                                                                           Completed?      Date

1.4     Prioritize Acquisition/Integration Issues and Concerns                                                              Y / N /A
1.5     Review Systems and Integration Requirements                                                                         Y / N /A
The following should be considered during a System Integration:
    Identify system implications of the acquisition
    Review systems affected by acquisition
    Gather data on potential system modification
    Identify key system personnel
    Discuss implications of systems integration with the acquisition/integration committee
    Prepare information plan to support the acquisition/integration project
    Provide checkpoints within the system consolidation/integration plan
    Implement plan
1.6      Assess Financial Reporting & Accounting Considerations                                                                Y / N /A
Prior to the Acquisition, Management should obtain some analytical financial information. The information might include, but is not limited to the
following:
      Obtain Pricing Analyses
      Review Valuation Models
      Review previous fairness Opinions
      Evaluate Budgets
      Review Operational Strategy and Plans
      Evaluate Projections used by Management to determine the purchase price for the Acquired Company
      Obtain Historical Financial Statements
1.7      Determine if Acquisition meets Rule 3.05 of Regulation S-X Requirements                                               Y / N /A
 Appropriate members of Management should perform analytical procedures to determine if the Acquisition qualifies under Rule 3.05 of Regulation
 S-X (e.g. Quantitative and Qualitative Disclosures regarding Market Risk). If the requirements are met, then the financial statements of the
 acquired company should be audited and filed with the Securities and Exchange Commission (SEC).
1.8      Obtain Board of Directors or Acquisition Committee, as Designated by the Board, Approval                              Y / N /A
 Approval from the Board of Directors or Acquisition Committee (as designated by the Board for Directors) is necessary for all acquisitions that
 meet any of the following conditions:
      Investment in acquiree, as a % of consolidated total assets, is greater than X%
      Proportionate share of the total assets of the acquiree as a % of consolidated total assets is greater than X%
      Income before taxes, extraordinary items, and cumulative effect of change in accounting principle of acquiree as % of consolidated
          income before taxes is greater than X%




Source: www.knowledgeleader.com                                                                                                   Page 4
                                                    Acquisition Closing Checklist
Acquisition Activity
  Tasks to be completed for each Activity
        Details of each task
                                                                                                                                 Task
                                                                                                                               Completed?      Date

1.9     Review Expenditures related to acquisition and integration activities                                                  Y / N /A
Prior to Due Diligence, Management should evaluate and approve the expected expenditures in regards to the acquisition and integration
activities. These expenditures can include, but are not limited to, contracts and purchase orders with service providers facilitating the acquisition
and integration activities and any other related expense.
2. Perform Due Diligence                                                                                                       Y / N /A
2.1     Perform Balance Sheet Confirmation                                                                                     Y / N /A
2.2     Evaluation of Current Capital Projects                                                                                 Y / N /A
2.3     Address Legal Concerns                                                                                                 Y / N /A
The appropriate members of the Legal Department and Management should review the Acquisition’s legal structure. The items to be addressed
should include, but are not limited to, the following:
      Obtain a listing of all subsidiaries, affiliates, and related parties of the party being Acquired
      Review the certificates of incorporation, with all amendments (including designations), for the party being acquired and all subsidiaries
      Obtain a listing of jurisdictions where the Acquired company is qualified as a foreign corporation or does substantial business
      Review shareholder/owner agreements
      Obtain a listing of decrees, judgments, orders or awards affecting or that will be affecting the acquired company
2.4      Review Material Contract Obligations                                                                                  Y / N /A
2.5      Preparation and Review of Tangible Asset Valuation                                                                    Y / N /A
2.6      Review Insurance Matters                                                                                              Y / N /A
The appropriate members of Management and the Acquisition /Integration Committee should review applicable insurance matters that are
currently or will be affecting the company to be acquired.
2.7      Tax Considerations for Foreign Entities                                                                                Y / N /A
Management should assess the Tax structure and related considerations to identify and potential implications it may place on ABC, Inc. The
items to be reviewed should include, but not limited to, the following:
       Obtain and review copies of Tax documents pertaining to related-party transactions with foreign entities and any associated transfer
           pricing issues
       Review an analysis of the Acquired company’s foreign tax credit position
       Evaluate the global legal structure chart
       Obtain and review copies of foreign revenue reports, including tax adjustments
2.8      Review Differences in Accounting Treatment                                                                             Y / N /A
Appropriate members of the Accounting Department and Management should evaluate the Accounting approaches for both ABC, Inc. and the
entity to be acquired to identify any differences. If any differences are identified, Management should verify the differences are disclosed and




Source: www.knowledgeleader.com                                                                                                       Page 5
                                                 Acquisition Closing Checklist
Acquisition Activity
  Tasks to be completed for each Activity
       Details of each task
                                                                                                                         Task
                                                                                                                       Completed?      Date

approved by the Acquisition/Integration Committee and/or Executive Management.
2.9    Review of Acquisition Checklist by appropriate individuals                                                         Y / N /A
The completion and approval of this Checklist by appropriate members of Management is evidence of proper oversight and review of the
Acquisition Valuation (See Section 4). The Appropriate members of Management should include, but are not limited to, the following:
    (insert position titles of employees who should be involved in the acquisition process)
3. Post Acquisition Activities                                                                                            Y / N /A
3.1    Prepare of Purchase Accounting Entries                                                                           Y / N /A
3.2    Review of Valuation of Acquisition                                                                               Y / N /A
Valuation of all accounts will be performed for all acquisitions.
     Beginning balances for the acquired company should be booked based on the results of the valuation
     A valuation will be performed by a third party at the discretion of the (insert position title)
     The value assigned to goodwill must equal the residual value between the purchase price and the asset
        valuation
3.3    Review Purchasing Accounting Entries                                                                                Y / N /A
The Appropriate members of the Accounting Department and Management should review the Purchase Accounting activity and subsequent
entries for completeness and accuracy and to verify the appropriate Accounting treatment is being applied in accordance with U.S. GAAP.
3.4      Assessment of Intangible Assets                                                                                   Y / N /A
A review should be conducted over the recording and accounting treatment of intangible assets to verify compliance with U.S. GAAP. The review
should be inclusive of the following, but not limited to:
     Patents
     Goodwill
     Intellectual Property
     Trademarks, Brand Names
3.5      File Acquisition’s Financial Statements with SEC                                                                  Y / N /A
Per Management’s previous assessment, if the Acquisition qualifies under Rule 3.05 of Regulation S-X (e.g. Quantitative and Qualitative
Disclosures regarding Market Risk), then the appropriate documents should be filed with the Securities Exchange Commission. If the
requirements are met, then the financial statements of the acquired company should be audited and filed with the SEC.
3.6      Review of Adjustments to Financial Statements                                                                     Y / N /A
The appropriate members of Management and the Finance Department should review and approve any changes made to ABC, Inc. Financial
Statements as a result of the Acquisition activity.




Source: www.knowledgeleader.com                                                                                               Page 6
                                   Merger & Acquisition Checklist


Member of Management                                                Date of Approval



4. Management Approval


<Insert Position Title and Name>                                         Date




<Insert Position Title and Name>                                         Date




<Insert Position Title and Name>                                         Date




<Insert Position Title and Name>                                         Date




<Insert Position Title and Name>                                         Date




<Insert Position Title and Name>                                         Date




Source: www.knowledgeleader.com                                        Page 7

								
To top