![]() Thus, data reported to the acquirer’s financial systems may not provide the granular level of detail for accounting and treasury to match intercompany transactions and perform reconciliations, netting, or settlement. Before the full integration of financial systems and charts of accounts, acquiree companies usually export their trial balances from their local accounting systems and use separate templates to post journal entries in the acquirer companies’ financial systems. With M&A transactions, companies often inherit heterogeneous financial systems and charts of accounts, which expose them to greater challenges in meeting reporting and compliance requirements. Intercompany accounting challenges facing M&A integrations Understanding the root causes of ICA challenges under the common M&A integration context is essential to navigating potential ways to address these challenges and help organizations achieve success in managing ICA activities during their M&A integration journey. As the global M&A market has been high-flying over the past six years, in which worldwide activity has rocketed past the $3 trillion mark, more and more companies face ICA challenges during the M&A integration journey. When coupled with the complexity of M&A integrations, ICA is more than the mess under the bed it may become the proverbial monster hiding under there. Nowadays, many companies are experiencing challenges in ICA as they grow their businesses, especially when the achieved growth is inorganic growth, such as mergers and acquisitions (M&A). Intercompany accounting (ICA) is sometimes referred to as the mess under the bed. A blog post by Beth Kaplan, managing director, Deloitte & Touche LLP Katie Glynn, senior manager, Deloitte & Touche LLP and Lina Wang, manager, Deloitte & Touche LLP
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