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Surgery Partners: Pushdown Accounting

In: Financial Analysis of Mergers and Acquisitions

Author

Listed:
  • Eli Amir

    (Tel Aviv University)

  • Marco Ghitti

    (SKEMA Business School)

Abstract

Normally, following a change-in-control event, the acquirer recognizes the acquired assets and liabilities of the target at fair value at the time of acquisition, while accounting for goodwill and non-controlling interests when appropriate. However, since 2014, US GAAP allows subsidiaries that issue separate financial statements, following a change-in-control event, to elect pushdown accounting. This accounting procedure allows the subsidiary to present its own assets and liabilities, including goodwill, at fair value (similar to the basis used in the parent company). In this case, we analyze the financial statements of Surgery Partners, a company in the healthcare services industry, who was acquired by a major private equity investor and elected pushdown accounting. Using the information in the case, we construct the balance sheet of Surgery Partners immediately before the election of pushdown accounting. This allows us to analyze the impact of pushdown accounting on the company’s financial statements, and the reason for electing this procedure.

Suggested Citation

  • Eli Amir & Marco Ghitti, 2020. "Surgery Partners: Pushdown Accounting," Springer Books, in: Financial Analysis of Mergers and Acquisitions, chapter 0, pages 271-281, Springer.
    • Handle: RePEc:spr:sprchp:978-3-030-61769-1_17
    DOI: 10.1007/978-3-030-61769-1_17
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