Practical Law is working in association with MacIntyre Hudson Advisory Services to deliver a one day course on Demystifying Financial Statements - The Essentials on Wednesday 26 March 2014.
About the Course
There are transactions where lawyers need an understanding of accounts. For example drafting the accounting aspects, such as the warranty section, of a share purchase agreement in an acquisition, the financial covenants clause in a loan agreement, loss of profit calculations in litigation, the tax consequences of these or advising on profit related pay schemes or pension plans as part of a remuneration scheme.
More generally lawyers also need to appreciate the impact the deal will have on the company's future financial statements; which can help to manage the risk that a transaction has unintended accounting consequences as well as meeting clients increasing expectations that their legal advisors have a thorough grounding in finance.
The material will be covered using both tutor led annotation on screen and team worked examples as well as a set of accounts (which delegates will be given the opportunity to mark up).
- Statutory accounts versus management accounts
- The framework of Financial Reporting in the UK
- Key components of a set of accounts
- The Audit Report
- Reinforcing why cash and profit are different and which rules when?
- Other fundamental accounting concepts, policies and estimates needing clarification (Going concern, consistency, prudence and the implications of changes in policies and estimates and why these are important)
- Line by line consideration of the key components of a set of statutory accounts
- Exploration of the notes to the accounts - what extra useful information may be there about the business?
- Events after the Balance Sheet date
- Demystifying common financial terms such as working capital, net assets and gearing
- Summary of key terminology differences used in UK GAAP and International Financial Reporting Standards (IFRS) accounts
You will benefit by:
- Spending less time in drafting and researching.
- Negotiating deals more effectively and efficiently.
- Being better prepared for client meetings.
Throughout the course, Practical Law precedents will be used as specimen documents, together with a series of case studies, to illustrate how the drafting impacts on the "interpretation" of the accounting clauses:
- Overview and introduction: The purpose of the accounting clauses: risk management, accounts warranties (and the link to financial due diligence), consideration and price adjustment clauses (and the link to warranties), production of completion accounts, locked boxes and earn-outs.
- Accounts warranties: Drafting general statutory accounts warranties, drafting more specific asset and liability warranties (including post performance warranties) - how to decide what to include and what to concede on and how to focus them, management accounts and accounting records warranties, an analysis and implications of the decision in Macquarie Internationale Investments Ltd and Glencore UK Limited and practical tips on how to get the most out of the warranties.
- Price adjustments and Completion Accounts: A purchaser "friendly" approach with explanation of common price adjustment mechanisms and targets including Net Assets, Working Capital, and a Debt Free Cash Free deal basis with a Net Debt adjustment concentrating on definitions and structuring the elements to avoid unintended consequences. Putting together Completion Accounts instructions and identifying questions that need to be asked of the advising accountants and your client.
- Locked Boxes: The reasons for a locked box, focusing on both seller and buyer points, the business risk associated with the "Agreed Accounts" and the issue of leakages.
- Earn Outs: Commercial reasons for choosing an earn-out; the risks (especially with continued seller involvement), accounting issues and possible definitions of earnings; and what should be considered for inclusion in the agreement.
Who should attend:
All lawyers of any level or practice area who need a better understanding of accounting terms or a refresher.
Numbers are limited to ensure quality.
To book your place, please complete the following registration form by 27 February 2014 to claim our Early Bird Offer.
For more information on this course please click here.
For more information on MacIntyre Hudson Advisory Services please click here.
Other MHAS Events:
- Wednesday 9 April 2014 - The Essentials M&A Tax Toolkit for Corporate Lawyers
- Thursday 15 May 2014 - Business Valuations - A Practical Guide for Lawyers
- Thursday 12 June 2014 - Distributable Profits - The Essentials and Practical Applications
- Tuesday 24 June 2014 - Financial Disclosures in and Offering Memorandum
26 March 2014
- 09h30: Registration
- 10h00: Morning session
- 13h00: Lunch
- 13h40: Afternoon session
- 17h00: Course finishes
6 CPD Points
Book before 05 March 2014 to claim our Early Bird Offer!
- Subscribers: £325
- Non-Subscribers: £375
- Subscribers: £400
- Non-subscribers: £450
Maclntyre Hudson Advisory Services LLP
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30 - 34 New Bridge Street
London EC4V 6BJ
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