Case Study

WilliamsMarston Clears the Way for a Foreign Entity Acquisition

Learn how WM assisted a $250 million public company in acquiring a foreign entity, necessitating the first-time audit of five separate entities under U.S. GAAP.

The Challenge

Disparate accounting systems and first-time audits of five separate legal entities under U.S. GAAP present a complex environment.

In a strategic move, a $250 million public company identified a foreign entity to acquire – though the acquisition presented several significant hurdles. The target company had never been consolidated or audited, and its historical financial records were maintained across multiple countries’ accounting principles. The Securities and Exchange Commission (SEC) filing required three years of audited U.S. GAAP financial statements, forcing the target company to evaluate its five separate entities and corresponding ledgers over a multiyear period.]

Adding to the complexity, these entities experienced a high volume of intercompany transactions with little oversight or reconciliation process. Without a functioning consolidation model and numerous complex transactions to evaluate, the company was not equipped to merge these entities and meet their financial statement deadlines.

The Solution

Close collaboration and technical accounting excellence establish a path forward.

WM immediately deployed a team of experts to the company’s offices in the United Kingdom, working with the management team and external auditors to begin work. The WM team built four unique revenue and cost of sales Excel-based sub-ledgers to facilitate the audit process and serve as an intermediate bridge until the company could implement a new accounting system.

WM completed ten technical accounting memos, which the audit firm’s national office reviewed. These memos covered critical areas, including functional currency, consolidation, stock-based compensation, revenue recognition and purchase accounting.

WM then converted historical records to U.S. GAAP and constructed an Excel-based consolidation model. This model was crucial for accurately reflecting the impact of foreign currency and capturing the intricacies of the high volume of intercompany transactions.

The Result

WM’s work landed the company a clean audit opinion and provided the foundation for continued integration.

The impact of WM’s guidance and implemented solutions was significant. A clean audit opinion was issued on the target company’s historical financial statements, and its audited U.S. GAAP statements and the acquirer’s pro forma financial statements were filed in Form 8-K/A on time.

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“I could not have made it through our initial public offering without the team from WilliamsMarston to field so many complicated issues. You have been fantastic, and it’s been a pleasure to reach this milestone with you!”Chief Financial Officer
IPO Company

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“I am sure we had one of the most complicated preferred stock conversions at our IPO than any other company. We appreciated your help. You made us look good, and we look forward to continuing to work with you.”Chief Financial Officer
IPO Company

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“I wanted to share my thanks for all the work WilliamsMarston did. Thanks to your great work, I felt confident going into the audit prepared.”VP Finance
Private Company

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“I continue to be impressed and grateful with the level of attention and technical expertise your team consistently provides.”Senior Finance Director
Public Company


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