Acquiring another business or portfolio company can be an onerous process, especially if that company has never been audited before and has not historically maximized shareholder returns or provided detailed reporting to a board of directors. Adding complexity to the process, U.S. Generally Accepted Accounting Principles (GAAP) require assets, liabilities and equity acquired during a business combination to be valued at fair value at the date of the acquisition.

Read more: 3 Steps to Estimate the Fair Value of Inventory in an Acquisition

One of the fastest and most effective ways to gain momentum and market share is through the acquisition of a competitor. Acquiring a competitor has two distinct advantages – it allows you to eliminate competition; and it allows you to gain new products, customers and employees.Before you break out the checkbook and make an offer to your archrival, you should consider a few things:

Read more: 7 Things to Consider Before Acquiring a Competitor

An accounting standard is a common set of principles, standards and procedures that define the basis of financial accounting policies and practices. Accounting standards are adopted by companies in India and issued under the supervision of Accounting Standards Board (ASB) which is a committee under Institute of Chartered Accountants of India (ICAI) consisting of representatives from government department, academicians, other professional bodies viz. ICAI, representatives from ASSOCHAM, CII, FICCI, etc.

Read more: Indian Accounting Standard

Author: Brett Fulesday

In this installment of our “M&A Essentials” series — offering a fundamental understanding of the concepts, issues and processes every business owner should be familiar with when considering and conducting the sale of a business — we talk about key areas to address when preparing a company for sale.

Business owners looking to sell often go to an advisor saying something along the lines of “I want to get out …” or “I received an offer to sell …” The timeframe generally is something like “… next year” or worse yet — “I have xx days to respond.”

Read more: M&A Essentials: 3 Key Considerations When Preparing to Sell

Selling a business is a complex endeavor. As advisors to business owners and shareholders of private companies, we have helped companies to navigate the process from beginning to end. We are excited to share those experiences and insights in this new series, “M&A Essentials.” The series will offer a fundamental understanding of the concepts, issues and processes every business owner should be familiar with when considering and conducting the sale of a business.

Today’s post discusses the relationships between a company’s valuation, purchase price and the cash proceeds received from a sale.

Read more: M&A Essentials: Understanding Purchase Price