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Technology Stocks : 3DFX
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To: Patrick Grinsell who wrote (12310)5/6/1999 12:34:00 AM
From: Obewon  Read Replies (1) of 16960
 
You're correct that it would not be tough to do after the merger.

The issue is that the accounting firm is required to follow U.S. GAAP (generally accepted accounting principles/practices), which REQUIRES for purchase accounting (which this deal is!), that the income statement reflects the combined entity ONLY from the effective DATE OF THE MERGER. If they were using the pooling method for the merger, they would restate back to the beginning of the most recent fiscal year.

However, 3dfx CAN ask/order its accountants to additionally provide PRO FORMA accounting statements reflecting the combined historical operations of the merger partners. This is typically done anyway for mergers using the purchase method so it is no big deal.

Obewon
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