Role of accounting in merger and acquisition deal performance

No Thumbnail Available

Files

URL

Journal Title

Journal ISSN

Volume Title

School of Business | Bachelor's thesis
Electronic archive copy is available locally at the Harald Herlin Learning Centre. The staff of Aalto University has access to the electronic bachelor's theses by logging into Aaltodoc with their personal Aalto user ID. Read more about the availability of the bachelor's theses.
Unless otherwise stated, all rights belong to the author. You may download, display and print this publication for Your own personal use. Commercial use is prohibited.

Authors

Date

2024

Department

Laskentatoimen laitos

Major/Subject

Mcode

Degree programme

Laskentatoimi

Language

en

Pages

28

Series

Abstract

Mergers and acquisitions (M&As) are critical strategic tools for corporate growth, restructuring, and diversification, often involving substantial financial stakes and complex decision-making. Despite M&As deal’s potential to create significant value, M&As frequently fail to achieve positive performance, par-ticularly for acquiring firms. This thesis examines the role of accounting in M&A deal performance, focusing on accountings role in acquiring firms' per-formance. A systematic literature review was conducted, analysing 26 peer-reviewed studies to identify key themes related to accounting's role in M&A performance evaluation. The review highlights three major themes: the impact of accounting choices and practices made before and during the M&A transaction, the use of ac-counting-based measures for post-acquisition performance evaluation, and additional factors influencing acquisition outcomes. Accounting conservatism, fair value assessments, and governance mechanisms emerged as prominent factors affecting M&A success. While accounting-based measures give valua-ble information into acquisition performance, their usage has challenges such as restatements, asset write-downs, and evolving accounting standards. The findings also point to the importance of aligning managerial incentives with shareholder interests to enhance post-merger performance. This thesis contributes to the existing literature by synthesizing findings on accounting's role in M&A performance and pointing out the complicatedness of performance evaluation in this context. The conclusions point towards the need for further research to address methodological challenges and explore the interplay between accounting practices and long-term value creation in M&A transactions.

Description

Thesis advisor

Salehi, Hamed

Keywords

mergers and acquisition, M&A accounting, acquisition performance, M&A performance

Other note

Citation

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-202501191343

Collections

[kand] Kauppakorkeakoulu / BIZ