Accounting Updates for Private Enterprises

welchllp.com
2015 Accounting Updates
for Private Enterprises
Wednesday, Oct. 21st, 2:30pm-5:30pm

welchllp.com
EVENT AGENDA
 IFRS Update
 ASPE Update
 Estate Planning / New Trust Rules
 Q & A
 15 Minute Break
 Economic Outlook After the Election
 Technical Tax Update
 Business Incentive Update
 Proactive Tax Planning
 Top 5 Stumbling Blocks to Negotiating a Deal –
Transactional Planning for the Exit Strategy
 Q & A

welchllp.comwelchllp.com
IFRS UPDATE
Bryan Haralovich, CPA, CA, CPA (Illinois) – Partner, Welch LLP

welchllp.com
IFRS UPDATE
Topics covered
 Revisions to existing standards
 New IFRS Standards
 Proposed IFRS standards

welchllp.com
IFRS UPDATE
Revisions to existing standards
 IFRS 10 Consolidated Financial Statements and IAS 28 Investments
in Associates and Joint Ventures
o Sale/contribution of assets between an investor and its associate or joint venture
 IFRS 10, IFRS 12 Disclosure of Interests in Other Entities and IAS 28
o Applying the consolidation exception for investment entities
 IAS 1 Presentation of Financial Statements-disclosure initiative
 IAS 27 Separate Financial Statements
o Equity method in separate financial statements

welchllp.com
IFRS UPDATE
New Standards
 IFRS 15 Revenue from Contracts with
Customers
Proposed Standards
 IAS 17 Leases

welchllp.com
IFRS 15 REVENUE
Overview
 Effective for annual reporting periods commencing after January 1,
2018 including interim reporting periods within that reporting period.
 US Non public entities: Annual reporting periods commencing after
December 15, 2018
 Retrospective application required
o Full retrospective application – adjust opening balance sheet of earliest
period presented
o Modified retrospective – adjust opening balance sheet of most current
period

welchllp.com
IFRS 15 REVENUE
Overview
 Replaces IAS 18 Revenue, IAS 11 Construction
contracts and related IASB guidance as well as over 200
specialized/industry specific revenue guidance under
US GAAP
 Joint transition group formed comprising 10 to 15
specialists
 Does not apply to lease or insurance contracts

welchllp.com
IFRS 15 REVENUE
Proposed changes
5 Step model to be applied regardless of type or industry:
1. Identify the contract(s) with the customer
2. Identify the separate performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the separate performance obligations
5. Recognize revenue when (or as) the entity satisfies a performance
obligation

welchllp.com
IAS 17 LEASES
Proposed changes
 Recognize lease asset and liabilities on the statement of financial
position measured at the present value of the unavoidable lease
payments
 Amortize leased assets and recognize interest expense on lease
liabilities over lease term
 Separate the total cash paid into principal portion and interest on
the cash flow statement
 Exemptions – leases under 12 months, leases of small assets
(laptops, furniture)

welchllp.com
IAS 17 LEASES
Impact of Proposed changes
 Covenants – working capital ratio, Debt to equity, TNW
 Improved EBITA
 Impact on deferred taxes
Timing
 New standard expect to be issued at the end of 2015
 Effective date not set, but not likely before January 2018

welchllp.com
Bryan Haralovich, CPA, CA, CPA (Illinois)
Partner
bharalovich@welchllp.com
@WelchLLP
CONTACT

ASPE UPDATE
Mark Jackson, CPA, CA – Senior Manager, Welch LLP

welchllp.com
SUBSIDIARIES
 New Section 1591 (Replaces Section 1590, Subsidiaries and
AcG-15, Consolidation of Variable Interest Entities)
 Effective January 1, 2016 (Early Adoption Permitted)
 Addresses situations where control obtained by means other
than voting interests
 Practically, little change from before

welchllp.com
SUBSIDIARIES
 If control through contractual arrangements, have additional
option to account in accordance with applicable section
(e.g. leases or financial instruments).

welchllp.com
JOINT ARRANGEMENTS
 New Section 3056 (Replaces Section 3055,
Interests in Joint Ventures)
 Effective January 1, 2016 (Early Adoption Permitted)
 More prescriptive than the previous standard –
accounting choices based on type of interest

welchllp.com
JOINT ARRANGEMENTS
 Categories:
o Jointly controlled operations
o Jointly controlled assets
o Jointly controlled enterprises

welchllp.com
JOINT ARRANGEMENTS
 Accounting presentation:
o Jointly controlled operations
 Record the assets controlled, liabilities
incurred and entity’s share of revenue and
expenses

welchllp.com
JOINT ARRANGEMENTS
o Jointly controlled assets
 Record shares of jointly controlled assets
and related liabilities; revenue based on
share of output and share of expenses

welchllp.com
JOINT ARRANGEMENTS
o Jointly controlled enterprises
 Policy choice – equity method, cost method
or as jointly controlled operation or jointly
controlled assets

welchllp.com
JOINT ARRANGEMENTS
 Contribution of assets by joint owner to joint arrangement:
o Recognize gains or losses immediately, to the extent
of non-related investors

welchllp.com
2014 ANNUAL IMPROVEMENTS
 Effective January 1, 2015
 Gain or loss on hedging item after anticipated transaction
occurs – recognize in net income
 Disclosure of carrying amount of impaired trade receivables
no longer required

welchllp.com
 Effective January 1, 2016 (early adoption permitted)
 Business combinations – clarifies disclosure requirements
when acquisition of assets
 Investments – require disclosure of impairment
losses/reversals for investments and leases
 Employee future benefits – requires at least one funded plan
to use funding valuation
2014 ANNUAL IMPROVEMENTS

welchllp.com
EXPOSURE DRAFT
 Redeemable Preferred Shares – Proposal is to require
presentation as liability
 If adopted, will not be effective before January 1, 2018

welchllp.com
Mark Jackson, CPA, CA
Senior Manager
mjackson@welchllp.com
@WelchLLP
CONTACT

Welch LLP – Accounting Update for Private Enterprises – October 21, 2015
Pamela L. Cross
Partner
pcross@blg.com
613-787-3559
Changes to the Taxation of Estates,
Testamentary Trusts, Disability Trusts,
Life Interest Trusts and
Charitable Giving on Death

Overview
• Background
• Qualified Disability Trusts (“QDTs”)
• Graduated Rate Estates (“GREs”)
• Life Interest Trusts (Spousal Trusts/Joint Partner
Trusts/Alter Ego Trusts)
• Charitable Giving on Death
• Planning Implications and Litigation Risks

Background
• Budget 2013 – Flat Top Rate Taxation for Testamentary Trusts
announced
• June 3, 2013 – 6 month consultation on Flat Top Rate Taxation
• Budget 2014 –
• Flat Top Rate Taxation for Trusts confirmed.
• Charitable donation changes announced
• August 29, 2014 – Draft Legislation released (30 day consultation)
• Flat Top Rate Taxation for all Trusts (except GRE and QDTs)
• Certain tax benefits limited to GREs (NEW)
• Introduction of Life Interest Trust Taxation Rules (NEW)
• October 10, 2014 – legislation released (Bill C-43)
• December 16, 2014 – Royal Assent: rules effective January 1, 2016

Qualified Disability Trusts
Requirements
• At end of year, trust is a testamentary trust that arose on
and as a consequence of death
• Excludes inter vivos trusts created during life
• Includes insurance trusts
• Trust is resident in Canada for the entire year (not just
the end of the year)
• In tax return for the year, trust elects jointly with ‘electing
beneficiary’ to be QDT and includes SIN of electing
beneficiary:
• No relief for late election
• If incapable, electing beneficiary may need court appointed guardian to
be able to make election

Electing Beneficiary
• Beneficiary qualifies for disability tax credit
(Note: Possible to include other beneficiaries in
trust)
• Only one QDT per disabled beneficiary: Difficult
to arrange for funding from multiple sources (i.e.
several family members) for one disabled
beneficiary.

Graduated Rate Taxation
QDT subject to graduated rates for each year of
election
But: “Recovery of Tax”
• QDTs subject to pay a recovery of tax if:
• None of the beneficiaries at the end of the year were
electing beneficiary for preceding year, OR
• Trust ceased to be resident in Canada, OR
• Capital distribution is made to non-electing
beneficiary

Recovery of Tax (Cont’d)
• Amount of recovery tax:
• Amount of tax that would have been paid in previous year if trust had
been subject to highest marginal rate and taxable income for that year
excluded amounts that were subsequently distributed as capital to
electing beneficiary
• Intent is to claw back tax savings for income taxed at graduated rates
which was subsequently distributed as capital to non-electing
beneficiary
• In year when electing beneficiary dies, or trust becomes
non-resident, or distributes to non-electing beneficiary –
loss of graduated rates and payment of recovery tax

Summary
• Only a testamentary trust (including insurance trust) can
be QDT
• QDT only available for beneficiaries who qualify for
disability tax credit
• Only one QDT per individual
• Make election each year in tax return
• Beware making capital distributions to other beneficiaries
• Recovery Tax mechanism may result in tax deferral not
tax savings

Graduated Rate Estates
• A GRE is an estate and is not a separate trust
• Conditions for an estate to be a GRE
• no more than 36 months have passed since death
• estate is a testamentary trust
• estate designates itself as the GRE in its first tax return
• deceased’s SIN provided in estate tax return
• no other estate is designated as the GRE of the deceased
• There is no grandfathering of existing trusts or estates
• Transition after end of GRE status – deemed year end.
Planning Point: Consider triggering any gains/losses in
existing testamentary trusts before end of 2015. Consider
benefit of winding up existing trusts at end of year.

Graduated Rate Estates
Why is GRE status important:
• graduated tax rates on income earned and retained in
the estate
• no tax instalment obligations
• Off-calendar year end permitted
• access to new flexible donation credit rules for donations
made in Will or by the estate (for deaths after 2015)
• nil capital gains inclusion for donation of shares on death
(for deaths after 2015)
• availability of 164(6) and 112(3.2) loss carryback rules –
private company planning on death

Life Interest Trusts (Spousal Trusts/Joint
Partner Trusts/Alter Ego Trusts)
• Life Interest Trusts - trusts for which a deemed
disposition occurs on the death of the surviving life
interest beneficiary:
• spousal and common-law partner trusts
• alter ego trusts
• joint spousal and common-law partner trusts
• Applies starting in 2016
• No grandfathering – applies to all life interests trusts
starting in 2016 regardless of when the trust created, or
whether they can be varied or amended

Life Interest Trusts
• New s. 104(13.4): on the death of the life interest
beneficiary (or on the second death for a joint partner
trust):
• trust has deemed year end at end of day of death, and
• all income of trust for shortened year (including any capital gains
realized on the 104(4) deemed disposition) is deemed payable in year
to deceased life interest beneficiary
• Result is capital gains on deemed disposition included in
the deceased life interest beneficiary’s terminal return;
trust claims a deduction for the income
• Tax shifted from Trust to estate of life interest beneficiary

• New 160(1.4) provides that the life interest beneficiary
and trust are jointly and severally, or solidarily, liable for
taxes owing as a result of 104(13.4)
• Explanatory Notes (released on October 30, 2014)
“Existing subsection 160(2) of the Act empowers the Minister of National
Revenue to assess the liability that arises under subsection 160(1.4)
against the trust at any time, and it is intended that the Minister apply
subsection 160(2), in respect of an amount owing under subsection
160(1.4), as though the trust were liable in the first instance for that
amount.”
• So, while income of the trust is included in the terminal
return, it is apparently intended that the tax be paid by
the trust. How will CRA administer?
• No CRA comment to date.

• If CRA does not enforce payment against trust, tax will
be payable by the life interest beneficiary (who does not
have the trust property);
• Can lead to inequities where beneficiaries of estate of
life interest beneficiary not the same as beneficiaries of
life interest trust.
• Spousal Trusts are commonly used in blended families
to ensure surviving spouse provided for while leaving
assets to “first” family. The shifting of the tax burden is
undesirable.
• What if executors don’t get along? Will litigation be the
result?

Scenario – Mike and Carol
• Mike is married to Carol. It is the second marriage for both,
each having children from their first marriage; they do not
have children together. Mike owns property with a fair
market value of $1 million and a nominal adjusted cost base;
it produces annual income of $50,000.
• Mike dies. Under the terms of his will, Mike establishes a
spousal trust for the benefit of Carol for her lifetime, it being
intended that she be entitled to the $50,000 of annual
income; there is no ability for the trustees to encroach on
capital for the benefit of Carol, it being intended that the
property be preserved for Mike’s children.
• Carol dies in 2016.

Scenario – Mike and Carol
• The value of the property in the spousal trust (in Mike’s Will)
remains at $1 million so that there is a $1 million capital gain
in the spousal trust as a result of the deemed disposition.
This is deemed payable to Carol immediately before her
death and is included in her terminal return (tax ~$250,000)
• At the time of her death, Carol also holds property with a fair
market value of $1 million and a nominal adjusted cost base.
As a result, Carol will also have a $1 million capital gain at
the time of her death to include in the terminal return. (tax
~$250,000)
• The residue of Carol’s estate is to be left to her children.
• Result: Carol’s estate (her children) bears tax liability of
$500,000. Mike’s estate (his children) bears no tax liability

• General Donation Rules:
• Amount of donation credit/deduction normally limited to 75% of net
income
• Unused amounts carried forward for 5-10 years depending on property
donated
• Current Rules: Gifts made in Will or by designation
• deemed to be made immediately before death
• credit can be used in date of death return or carried back to
immediately preceding year
• income limit increased to100% of income
• Split receipting rules - allow receipting of a gift even though
the donor retains an “advantage”
42

New “Default” Rule for gifts on death:
• Gifts by individuals in Will, designated gifts, or gifts made
by estate, will be deemed made by the estate at time
property actually transferred to charity/donee
• Value of gift = value at time of donation
• Estate can carry-forward unused credit for 5 years
• Caution: Need to review existing planning which was
premised on donation being deemed to have been made
immediately before death!

Special Rules for GREs:
• If estate is a GRE at time of donation, credit can be
claimed:
• By deceased, in year of death or immediately preceding year
• By GRE, in year of gift or prior year of the GRE
• 5 year carry-forward should be available if estate
continues after GRE status ceases
• Therefore, if gift made in last year of GRE status, could
have up to 10 years to use credit.
• Credit can be allocated to different years to maximize
use.

Special Rules for GREs:
• Very important gift is made by GRE (i.e. within 36
months of death)
• This may be difficult if there is complex estate, litigation,
etc.
• Must ensure GRE does not inadvertently lose its status
before gift made
• Property donated must be property acquired by GRE as
a consequence of death. Therefore, cannot fund gift by
way of (i) dividends or (ii) borrowed funds.

Planning Implications
1. Identify potentially impacted planning
• life interest trusts – how to deal with tax shifting after 2015
• Multiple Will planning – do executors get along? Will they cooperate?
Need to file single tax return to qualify estate as GRE?
• Charitable gifts on death:
• need to review planning to ensure credit will be available to offset
tax liability
• Charitable gifting of assets after life interest trust more complicated
• Can existing planning be changed (new Wills, Trusts or donation
arrangements)?
• What if testator/settlor is incapable? What if life interest trust already in
place? Can documents be varied by court order? Is capital
encroachment possible?
2. Future Planning
• Blended families, charitable giving

Q & A Session

10 Minute Break

Canada:
Economic Outlook After the Election
William Chin, MBA – Chief Technical Analyst &
Portfolio Manager, Caldwell Investment Management Ltd.

www.caldwellinvestment.com Macroeconomic Strategy
Thoughtful Investing
Founded in 1980 by Thomas S. Caldwell, current
Chairman
100% employee controlled
Conservative Approach
Active Management

Whose Policy is it anyway?

Potential Impact of the Election
• Canada & the Commodities Super Cycle
• Challenges & Opportunities – Canada can
lead
• Fiscal (Keynesian) Policies
• Current Account Deficit

The Commodities Super Cycle

Canada’s Challenges
Source: Bank of Canada

Canada’s Challenges:
Mexican Pesos per Loonie

Current Account Deficits

We Need a Lower Loonie

Canada’s Opportunities:
Infrastructure Investment

Re-vigorate Exports

Source: Industry Canada
Small Businesses

Debt vs Growth

•
Canada – Debt as % of GDP is manageable
(No need to raise taxes!)

Household Debt as % of GDP

High Levels of Household Debt
Source: IMF

Disclosure
This document is provided for information purposes only, it is not intended to convey investment, legal, tax
or individually tailored investment advice. All opinions and estimates contained in this report constitute
Caldwell Investment Management Ltd.’s judgment at the time of writing and are provided in good faith. All
data, facts and opinions presented in this document may change without notice. Past performance is not a
guide to future performance. Future returns are not guaranteed. No use of the Caldwell Investment
Management Ltd. (CIM) name or any information contained in this report may be copied or redistributed
without the prior written approval of CIM. The information contained in this document is designed to
provide you with general information and is not intended to be comprehensive investment advice
applicable to the circumstances of an institutional or individual investor. Commissions, trailing
commissions, management fees and expenses all may be associated with mutual fund and investment
mandate investments.

Technical Tax Update
Don Scott, FCPA, CA – Tax Partner, Director of Tax Services – Welch LLP

welchllp.com
CORPORATE TAX RATE UPDATE
 Federal Small-business Tax Rate
o From 11% to 9% (over 4 years)
o Impact on Gross-up Factor and DTC
 Specified Investment Business
o Changes Needed to Definition?
o Access to Small Business Deduction

welchllp.com
NON-ELIGIBLE DIVIDENDS
2015 2016 2017 2018 2019 and
onward
Small Business Tax Rate 11.00% 10.50% 10.00% 9.50% 9.00%
Dividend Gross-up % 18.00% 17.00% 17.00% 16.00% 15.00%
Federal DTC rate 11.02% 10.52% 10.02% 9.51% 9.03%
Top marginal federal tax
rate on non-eligible
dividends
21.20% 21.62% 22.21% 22.61% 22.96%
Effective federal tax rate 29.89% 29.85% 29.98% 29.96% 29.90%

welchllp.com
TAX FACTS & FIGURES
 Link on our website to our Facts & Figures For Tax
Preparation & Planning Document:
http://www.welchllp.com/wp-content/uploads/2014/10/February-2015-Tax-
Facts-and-Figures-English1.pdf

welchllp.com
ONTARIO RETIREMENT
PENSION PLAN (ORPP)
 “Comparable” workplace plan
 3.8% / Max 90K Earnings / $3,286 Combined
 $12,815 Max Benefit
 Starts 2017 –
o “Four waves”
o Phased combined rates
YR 1 – 1.6%
YR 2 – 3.2%
YR 3 – 3.8%
 Self-employed

welchllp.com
ORPP – “FOUR WAVES”
 Wave 1:
Large employers (500 or more employees) without registered workplace
pension plans. Contributions to start January 1, 2017.
 Wave 2:
Medium employers (approximately 50- 499 employees) without registered
workplace pension plans. Contributions to start January 1, 2018.
 Wave 3:
Small employers (50 or fewer employees) without workplace pension plans.
Contributions to start January 1, 2019.
 Wave 4:
Employers with a workplace pension plan that is not modified or adjusted to
meet the comparability test, as well as employees who are not members of
their workplace's comparable plan. Contributions to start January 1, 2020.

welchllp.com
RETIREMENT SAVINGS
 TFSA
o $10,000 annual contribution limit
o Effective 2015
 RRIF
o Minimum withdrawal factor changes
o Lower minimum amounts in early years

welchllp.com
CHARITY UPDATE
 Donations Involving Private Company Shares or
Real Estate
 Investments in Limited Partnerships by
Registered Charities
 Gifts to Foreign Charitable Foundations
 Recap of New Rules for Donations by Will
(2014 Budget Measure)

welchllp.com
Don Scott, FCPA, CA
Tax Partner, Director of Tax Services
dscott@welchllp.com
@WelchLLP
CONTACT

Business Incentives Update
Joshua Smith, CPA, CA – Leader Business Incentives, Welch LLP

welchllp.com
AGENDA
 Ontario Interactive Digital Media Tax Credits (OIDMTC)
 Apprenticeship Training Tax Credits (ATTC)
 Scientific Research and Experimental Development (SR&ED)

welchllp.com
OIDMTC
Qualifying products – old rules
 Interactive product that uses two of; text, image, sound
 Primary purpose to:
o Educate
o Inform
o Entertain

welchllp.com
OIDMTC
Qualifying products - new rules
 Applicable to products commenced after April 23, 2015
 Interactive product that uses two of; text, image, sound
 Primary purpose to
o Entertain
o Educate children under 12
 Specific exclusions
o Databases, search engines, news, public affairs, opinions, etc.

welchllp.com
OIDMTC
Eligibility test
• Old all or substantially all test
o 90% or more of product created by the corporation in
Ontario
• New 80/25 test starting April 24, 2015
o 80% of total development attributable to remuneration in
Ontario
o 25% of development labour attributable to eligible wages
of the corporation

welchllp.com
ATTC
Old rules
• Up to 45% tax credit
• Maximum $10,000/apprentice/year
• Covers first 48 months of apprenticeship
New Rules (apprenticeships starting after April 23, 2015)
• Up to 30% tax credit
• Maximum $5,000/apprentice/year
• Covers first 36 months of apprenticeship

welchllp.com
SR&ED
• No legislative changes
• Process changes continue
• Five questions approach
• Change in writing style

welchllp.com
SR&ED
Recent cases
• Feedlot Health Management
o “In respect of” has a broad meaning
• 6379249 Canada Inc.
o SR&ED includes incremental improvement

welchllp.com
Joshua Smith, CPA, CA
Leader Business Incentives
jsmith@welchllp.com
@WelchLLP
CONTACT

Proactive Tax Planning
Jim McConnery, CPA, CA, TEP – Partner, Welch LLP

welchllp.com
PROACTIVE TAX PLANNING
Why does it matter:
 Minimize annual tax
 Minimize tax on exit
 Address potential transaction matters
 Protection for business and family
 Simplify estate process

welchllp.com
FUNDAMENTALS
 25% rate on gains
 Deemed disposition at death can trigger gain
 Funding tax at death can be an issue
 Annual tax savings based on effective income splitting

welchllp.com
TAX MINIMIZATIONS - CGE
 Optimize access to $813,600 lifetime CGE
 Shares must meet CGE criteria
 Tax savings of ~ $200,000 per CGE
 1 CGE is a good thing
 Several CGEs is even better

welchllp.com
BENEFITS OF A FREEZE
 Goal is to freeze the value of shares held by principal
 Future value accrues on common shares and does not
increase terminal tax liability
 Family trust owns new common shares
 Access family member CGEs

welchllp.com
FREEZE  Principal owns fixed value
control shares of OpCo
 Future growth belongs to
shares held by trust
 Income splitting via trust
 Principal is a beneficiary of
the trust
o Access to future value if
desired
o Trust share value is not
part of terminal tax
OpCo
Trust
Principal Family

welchllp.com
TAX MINIMIZATION - FREEZE
 Freeze locks in value of principal’s shares
 Estimate tax and plan for funding
 Reduce value of freeze shares by redeeming over time
 Principal still controls business
 Can exit by selling shares held by principal and trust
 Trust framework can also facilitate succession planning

welchllp.com
FINANCIAL SECURITY PLANNING
 Plan now includes a HoldCo as a
trust beneficiary
 OpCo dollars can move to
HoldCo tax-free
 Opportunity to accumulate a nest egg
that is separate from business
 Assists with CGE planning
 Income splitting via trust
 Avoids accumulation of funds in OpCo
that may be exposed to creditors
OpCo
Trust
Principal Family
HoldCo

welchllp.com
TRANSACTION PLANNING
 Assume $11.6 MM gain on sale with $1.6 MM of CGE shelter
 Without planning:
o $2.5 MM of tax and $9.1 MM of after-tax funds
 HoldCo sale plan
o Tax decreases to approximately $1.25 MM
o $10.35 MM of after-tax funds (½ personally; ½ in holding company)
o Tax deferral of $1.25 million
 Hybrid plan
o Share sale to access CGE and an asset sale
o Tax result is dependent on value and nature of business assets
o Ideal if most of the business value relates to goodwill
o Buyer may pay more on an asset deal based on tax shelter created

welchllp.com
SUMMARY
 Minimize annual tax
 Optimize structure for eventual sale or deemed disposition
 Facilitate succession planning
 Ideal to plan a minimum of 2 years in advance
 Review structure annually
 Ensure that sale plan minimizes tax

welchllp.com
Jim McConnery, CPA, CA, TEP
Partner
jmcconnery@welchllp.com
@WelchLLP
CONTACT

TOP 5 STUMBLING BLOCKS TO
NEGOTIATING A DEAL
TRANSACTIONAL PLANNING FOR THE EXIT STRATEGY
Stephan May, MBA – Managing Director, WelchGroup Consulting

welchllp.com
TRANSACTIONAL PLANNING
KEEPING THE DEAL
“ON THE RAILS”

welchllp.com
TOP 5 “DEAL KILLERS”
Financials Vendors Customers
Deal Expectations 3rd Party Advisors

welchllp.com
FINANCIALS
EXAMPLE “Please provide sales and profit margins by
major product and service offering, by major customer,
geographic region, distribution channel by month-to-
month for the last 3 years and projected for the next
three years”
DATA By:
Date (Day/Month/Year) Business Line
Vendors Employees (Sales Reps/Contractors, etc.)
Customers Distribution Channels
Product/Service Line Geographic Region
BUYERS WANT DATA! ARE YOU READY TO DELIVER?!

welchllp.com
VENDORS
TRANSFERRING VENDOR CONTRACTS CAN BE LIKE
MOVING A SHIP.
Be aware that most vendor contracts have
automatic break-up clauses in the event of a
change in control. Time and again, deals can
be killed or delayed because Vendors
inability to be flexible or timely in
transferring contracts.

welchllp.com
CUSTOMERS
YOU’RE SELLING OR BUYING CASH FLOW.
HOW “TRANSFERABLE” ARE THE CLIENTS?
It is essential to determine if clients can be
transferred to the new party. Potential issues
that can complicate the transfer include
vendors , contracts, and relationships.

welchllp.com
DEAL EXPECTATION
Whether buying or selling, it is important
that management understands the deal and
can clearly articulated it to the other party.
HAVE A GAME PLAN, DON’T “WING IT”

welchllp.com
3rd PARTY ADVISORS
Deals can be fun & exciting, and the right
advisors can provide invaluable advise.
However, having the right advisor, one that is
experienced can make all the difference.
TOO MANY CHEFS AND NOT ENOUGH COOKS.

welchllp.com
Stephan May, MBA
Managing Director
smay@w-group.com
@WelchGroup
CONTACT

Thank you!
In the next few days, you will receive a digital copy of the slides
and links to all of our applicable content.

Accounting Updates for Private Enterprises

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (19)

Similar to Accounting Updates for Private Enterprises

Similar to Accounting Updates for Private Enterprises (20)

More from Welch LLP

More from Welch LLP (20)

Recently uploaded

Recently uploaded (20)

Accounting Updates for Private Enterprises

Editor's Notes