Insights > Providing Purchase Accounting and Audit Support for a Growing Telecommunications Company

Providing Purchase Accounting and Audit Support for a Growing Telecommunications Company

Challenge

A leading private equity fund purchased an independently owned rural communications provider. Post close, the new portfolio company needed to prepare the opening balance sheets and financial statements that its accounting team did not have prior experience doing. Over the next two years, the PE fund also bought multiple other regional providers to merge with the first company as a single, combined entity. In addition to completing the accounting requirements for the new acquisitions, the combined company also needed to adopt the new revenue recognition accounting standard and align the tax provision to the new structure.

With Riveron supporting much of the transaction and audit-related work, the client was able to focus on the daily accounting activities and other strategic priorities

How We Helped

Riveron was engaged by the PE fund, with which we had a long-standing relationship, to help the initial portfolio company with purchase accounting, debt modification, and financial statement preparation. We worked closely with the chief financial officer and controller to identify and address issues, many of which the company had not encountered before as a privately-owned business. We prepared the opening balance sheets, analyzed the changes to the debt agreements, and worked in partnership to make the necessary financial statements and footnotes. We also created a framework to serve as a structure for future acquisitions.

After the success of the first transaction, Riveron was engaged to help the portfolio company and subsequent acquisitions adopt the new revenue recognition standard, ASC 606. Throughout the engagement, we also partnered with the combined portfolio company to provide debt modification analysis and footnotes for multiple years, prepared financial statements, and carried out the accounting and financial statement presentation related to a substantial equity sale. Also, Riveron prepared the company’s tax provision. We worked directly with auditors to minimize the time needed by company management, streamlined processes, and successfully guided the organization through its audit.

Results

Drawing on Riveron’s broad scope of services, technical expertise, and hands-on execution support, the PE fund and portfolio company successfully navigated multiple acquisitions and an equity sale over a multi-year period, complying with the associated accounting, financial reporting, tax, and audit requirements. With Riveron supporting much of the transaction and audit-related work, the client was able to focus on the daily accounting activities and other strategic priorities. Additionally, our engagement established the underlying processes, templates, and frameworks to meet the organization’s requirements moving forward.

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