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,

• Recognising acquisition-related adjustments including fair value uplift, intangible asset recognition, and goodwill computation, and,

• Ensuring compliance with IFRS 3 disclosure requirements detailing the financial impact of the acquisition in the group accounts.

Given the regulatory and audit scrutiny around business combinations, our proactive and structured approach ensured all necessary financial adjustments and disclosures were fully documented and aligned with IFRS requirements.

Seamless collaboration with auditors and advisors

Throughout the engagement, we worked closely with the client, their auditors, and their tax and other advisors, providing technical insights, supporting audit queries, and ensuring a smooth and efficient audit process. Our collaboration included:

• Regular status updates and meetings to align all stakeholders,

• Proactive issue resolution to address auditor queries in real-time,

• Clear and transparent documentation to facilitate a smooth audit review.

Working with us

The financial impact of disposals, acquisitions, and other corporate transactions extends far beyond the deal itself - affecting everything from reported earnings to investor disclosures. Proactive financial reporting planning is essential to ensure compliance, minimise audit challenges, and enhance transparency.

At Buzzacott we provide specialist expertise in UK GAAP and UK-adopted IFRS financial reporting, ensuring your business transactions are accurately reflected in your financial statements. Whether your needs involve complex consolidations, first-time IFRS adoption, or business combinations, our practical, hands-on team will work alongside you to ensure accuracy, compliance, and efficiency.