Chapter 5 — Accounting Matters 5.1 Introduction 5.2 Structure of the IPO Transaction 5.2.1 Carve-Out Considerations 5.2.2 Spin-Off Transactions 5.2.3 Reorganization in Anticipation of a Transaction 5.3 Related-Party Transactions 5.3.1 Definition of a Related Party 5.3.2 Presentation and Disclosures Associated With Related-Party Transactions 5.3.3 Related-Party Disclosures Under U.S. GAAP 5.3.4 Identifying Related-Party Transactions 5.3.5 Focus of SEC 5.3.6 Regulation S-K, Item 404(a)(5), “Transactions With Related Persons” 5.3.7 Regulation S-K, Item 404(b), “Review, Approval or Ratification of Transactions With Related Persons” 5.4 Business Combinations 5.5 Financial Instruments 5.5.1 Valuation of Financial Instruments 5.6 Liabilities, Equity, and Temporary Equity 5.6.1 Distributions to Owners Under SAB Topic 1.B.3 5.6.2 Changes in Capitalization 5.6.3 SAB Topic 4.E, “Receivables From Sale of Stock” 5.7 Accounting for Offering Costs — SAB Topic 5.A 5.7.1 Aborting or Postponing an Offering 5.8 Share-Based Compensation 5.8.1 Valuation 5.8.2 Other Pre-IPO Issues 5.8.3 Modifications 5.8.4 Disclosures 5.9 Income Taxes 5.9.1 Separate or Carve-Out Financial Statements 5.9.2 Change in Tax Status 5.9.3 Tax Consequences of Transactions Among or With Shareholders 5.9.4 Interim Reporting 5.9.5 Tax Effects of Executive and Employee Compensation 5.9.6 Additional Disclosure Requirements 5.9.7 Resource Considerations 5.10 Earnings per Share 5.11 Segments 5.11.1 ASU 2023-07 — Improvements to Reportable Segment Disclosures 5.12 Disaggregation of Income Statement Expenses 5.13 Subsequent Events