Shearman & Sterling LLP
Issue link: https://digital.shearman.com/i/1494417
Financial Statement Requirements for Acquisitions Financial Statements – The Basic Requirements 29 • In connection with an acquisition, additional financial statements may be required: • Historical Target Financials • Pro Forma Financials (material acquisition) • Most recent fiscal year • Most recent interim period • Several stakeholders to be included early in the process: • Management of the target • Auditors of the target • Auditors of the acquiring company • Rule 3-05 of Regulation S-X requires the presentation of financial information for a (1) significant acquired business or (2) a business of which an acquisition is probable Three things here to break down: • Is the acquisition an acquisition of a business? • Is the acquisition probable? • Is the acquisition significant? • Separate from legal requirements, there may be a marketing reason driving the inclusion of target/pro forma financials 1 2 3