IFRS Misstatements and Valuation Impact in an M&A Dispute
Brattle was retained on behalf of an acquirer in an Australian litigation concerning alleged accounting misstatements by an acquired company. The Brattle team evaluated several accounting issues, including whether the acquired company’s long-term customer contract related to a public-private partnership (PPP) was “onerous” under International Financial Reporting Standards (IFRS) – i.e., that the contract’s costs of fulfillment exceeded expected economic benefits. Specifically, the team analyzed the financial impact of the misstatements and quantified damages by assessing how the misstatements and potential fraud indicators would have affected investor risk perceptions and acquisition consideration.
