There was an interesting article in The Wall Street Journal today about earn-outs. This article pointed out that the payments disbursed under earn-outs are not treated as compensation expense, which is subtracted from earnings. Instead, these payments appear as contingent payments on the cash-flow statement and intangible assets on the balance sheet, neither of which drive investor sentiment as much as the earnings numbers on the income statement.
These are some of the issues addressed at The Business Development Academy's Mergers & Acquisitions courses. For more information, please visit www.bdacademy.com.
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