From the Inside Out.
"The accounting consequences of a deal are fixed at signing — not when your CFO reads the audit file six months later. Structure it right before you sign."
— Finerio Transactions Practice
Every Deal Has Accounting Consequences
Every significant commercial transaction — an acquisition, a joint venture, a restructuring, a new financing arrangement, a lease, a revenue contract — has accounting consequences that must be correctly understood and documented before the deal closes. The accounting treatment can significantly affect your reported profits, asset values, debt ratios, and tax position.
Transaction Accounting Advisory means having a specialist sit alongside your deal team or finance team before and during a transaction — interpreting the accounting standards that apply, advising on how to structure the deal to achieve the desired accounting outcome, and documenting the position in a way that satisfies auditors and regulators.
In the UAE's active M&A and real estate markets, this service is critical for any company acquiring assets, restructuring operations, or preparing for a capital event. Finerio brings Big 4-level transaction accounting expertise to the deals market — at a scale and cost accessible to mid-market businesses.
The many faces of transaction accounting
Deal teams, CFOs, and investment bankers describe this service in many ways — all referring to the same accounting expertise applied in a transactional context.
Transaction Accounting Services
Specialist accounting advisory for every type of complex transaction — from acquisitions and restructurings to new financing structures and group reorganisations.
Key Activities in a Transaction Engagement
From pre-deal structuring through to post-close integration — here is what our transaction accounting team delivers at every stage.
Transaction Overview & Accounting Issue Mapping
At deal inception, we review the proposed transaction structure and identify every accounting issue that needs to be resolved — creating a comprehensive issues list and resolution roadmap.
Control Assessment
Under IFRS 10, whether a transaction results in "control" determines whether full consolidation is required. We assess control based on power, exposure to returns, and ability to use power — a critical step in determining the accounting treatment.
Acquisition Date Determination
The acquisition date — when control transfers — is critical in IFRS 3, as it determines which assets/liabilities are included in the PPA and from when results are consolidated. We advise on the correct date based on contractual and practical control transfer.
Fair Value Assessment Coordination
Coordinating with valuers and specialists to ensure fair values assigned to acquired assets and liabilities are appropriate, documented, and consistent with IFRS 13 fair value measurement principles.
Intangible Asset Identification
Identifying and valuing intangible assets that must be recognised separately from goodwill under IFRS 3 — customer lists, technology, brand names, licences, and non-compete agreements — using appropriate valuation methodologies.
Goodwill Calculation & Documentation
Calculating goodwill as the residual between acquisition consideration and fair value of net assets acquired — and preparing the formal IFRS 3 disclosure schedule for the financial statements.
Pro-Forma & Completion Accounts Review
Reviewing completion accounts mechanisms — locked-box vs completion accounts — and advising on the accounting treatment of purchase price adjustments arising from working capital, debt, and cash positions at closing.
Technical Accounting Memo Preparation
Preparing formal technical memos documenting every significant accounting judgment made in the transaction — creating the audit trail that will satisfy your auditors when they review the deal accounting.
Investor & Stakeholder Accounting Communication
Preparing clear, plain-language summaries of the transaction's accounting impact for management, board, or investor communication — including pro-forma financial impact analysis.
Post-Deal Accounting Integration
Ensuring the acquired entity's accounting policies are aligned to the group's, intercompany transactions are captured, and the first post-acquisition consolidation is prepared cleanly and on time.
Questions we hear from clients every week.
Clear answers to the most common questions about transaction accounting advisory.
When you acquire a company, the price you paid must be allocated across all identifiable assets and liabilities at their fair values, with the excess recorded as goodwill. This is called a Purchase Price Allocation (PPA). It matters because: (1) identified intangible assets like customer relationships must be amortised, reducing future profits; (2) goodwill must be tested for impairment annually; and (3) the day-one balance sheet of the acquired business shapes every subsequent period's reported performance. Getting PPA wrong — or not doing it at all — is a material accounting error that auditors will correct, often at significant cost to your credibility.
In an asset deal, you buy specific assets and liabilities — each is recorded at its acquisition cost (which equals fair value on the purchase date). There is no goodwill unless you are acquiring a "business" as defined under IFRS 3. In a share deal, you acquire the legal entity — triggering a full business combination under IFRS 3, requiring a PPA and recognising goodwill on any excess price paid. The accounting treatment is fundamentally different, and we advise clients on the implications of each structure before signing.
A common control transaction occurs when assets or entities are transferred between companies that are ultimately owned by the same person or group — for example, moving a subsidiary from one holding company to another within the same group. IFRS 3 explicitly excludes common control transactions, and there is currently no definitive IFRS standard governing them (the IASB has a project in progress). We advise on the available accounting approaches — book value, fair value, or predecessor accounting — and document the policy chosen in a formal technical memo.
Under IAS 32, a financial instrument is classified as debt if the issuer has a contractual obligation to deliver cash or another financial asset. If there is no such obligation (e.g., ordinary shares), it is equity. Convertible instruments, preference shares, and hybrid instruments often have features of both — and must be split into a debt component and an equity component at issuance. This classification has a direct impact on your reported gearing, interest expense, and EPS. Getting it wrong can materially misrepresent your financial position to lenders and investors.
Before signing is almost always better. Pre-deal engagement allows us to: (1) advise on how different deal structures affect the accounting outcome; (2) identify accounting issues in the target that should affect the price or structure; (3) build the accounting model for the day-one balance sheet in advance; and (4) prepare auditor-ready documentation before the closing date. Post-deal accounting work is still valuable — but it can only document what happened, not improve the outcome. The most value is created before the ink dries.
An earn-out (contingent consideration) is a deferred portion of the purchase price that depends on the target hitting future performance milestones. Under IFRS 3, earn-outs classified as consideration must be recognised at fair value on the acquisition date and remeasured to fair value at every subsequent reporting date, with changes going through the P&L. This creates ongoing income statement volatility. We calculate the fair value of the earn-out at closing, determine the correct accounting classification (consideration vs. remuneration in some cases), and manage the subsequent remeasurement process each period.
Closing a deal soon?
Whether you're in the middle of an acquisition, restructuring your group, or just mapping out a new structure — bring us in early for the best outcome.