Roadmap
Carve-Out Transactions
(November 2021)
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This Roadmap discusses key factors for entities to consider as they
prepare their carve-out financial statements. “Carve-out financial
statements” is a general term used to describe financial statements
derived from the financial statements of a larger parent entity.
Carve-out transactions might occur when a parent entity wishes to
pursue a sale, spin-off, initial public offering, or special-purpose
acquisition company transaction involving a portion of the parent
entity. Carve-out financial statements are necessary to complete a
carve-out transaction and reflect the portion of a parent entity’s
balances and activities that are the subject of the transaction.
Certain SEC staff guidance addresses some elements of carve-out
financial statements (e.g., when the statements will be included in
an SEC filing), and parent entities often refer to the SEC staff’s
guidance on preparing financial statements for nonpublic carve-out
entities. However, there is no single set of comprehensive guidance
on preparing carve-out financial statements.
In addition, the 2021 edition contains On the Radar, a new section that
briefly summarizes emerging issues and trends related to the comment
letter topics addressed in the Roadmap. On the Radar is also available as a stand-alone
publication.
Be sure to check out other titles in Deloitte’s Roadmap series, our comprehensive,
easy-to-understand collection of accounting guides on selected
topics of broad interest to the financial reporting community.