Finance

Leveraged Finance Academy: Introduction to Leveraged Finance - 7 March 2023

Shearman & Sterling LLP

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Financial Statement Requirements for Acquisitions (cont.) Financial Statements – The Basic Requirements 39 • If pro forma financial information is included in the offering memorandum, the comfort letter should include negative assurance as to compliance with Regulation S-X and the proper application of the identified adjustments • Negative assurance may only be given if the auditors have: • Knowledge of the accounting and financial reporting practices of the issuer, or in the case of a business combination, of a significant constituent part of the combined entity, which is usually obtained through an audit; and • Performed the audit of the annual financial statements or a review of the interim financial statements of the entity to which the pro forma adjustments were applied Note: This does NOT comfort the pro forma numbers, just blesses the compliance with and application of the methodology

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