M&A and Valuation Model

Simplifies Mergers, Acquisitions, and Consolidations with Streamlined Processes

Our M&A and Valuation Model supports tagging of development spend and organic growth while integrating an embedded consolidation, planning, and budgeting framework.

This solution ensures efficient management of M&A activities with enhanced visibility and control.

Introduction to Merge & Acquisition(M&A) Models in OneStream

To support accurate consolidation, reporting, and business insight around mergers and acquisitions, we have implemented two complementary models in OneStream: the Equity Register and the M&A Revenue Recognition Model. Together, they align with key accounting principles to ensure both technical compliance and analytical transparency.

1. Equity Register

• The Equity Register model is primarily used to record equity investments and related FX rates at the time of the transaction. This is essential for applying historical rate translation in consolidation, in accordance with IFRS and US GAAP principles governing foreign currency translation (e.g., IAS 21 / ASC 830).
• Accounting background:
• When an entity makes an investment in a foreign subsidiary, the equity transaction must be translated into the group reporting currency using the exchange rate on the transaction date (historical rate).
• This ensures proper tracking of capital contributions, divestitures, goodwill adjustments, and equity remeasurements.
• During consolidation, equity accounts (e.g., Share Capital, Retained Earnings) must be translated using historical FX, whereas other balance sheet and income statement items follow different rates (e.g., closing rate, average rate).

Model purpose in OneStream:

• Capture the FX rate used for each equity transaction (initial investment, step acquisition, divestiture, etc.).
• Enable equity movement tracking over time.
• Support consolidated reporting using correct FX translation methodology.
• Provide audit trail for group equity structure changes.

2. M&A Model for Revenue Recognition

• The M&A Revenue Recognition model is designed to distinguish and explain revenue changes due to M&A activity versus organic business growth. It supports comparative analysis between scenarios such as Actual vs Forecast or Actual vs Budget, tagging variances by business driver.
• Accounting background:
• From a financial reporting and management accounting perspective, it is important to understand whether revenue changes are due to:
  
  • Structural changes (mergers, acquisitions, or disposals)
  • Or operational performance (organic growth or decline)
• This is critical for internal analysis, investor reporting, and management KPI tracking (e.g., like-for-like sales, pro forma reporting).

Model purpose in OneStream:

• Compare revenue (and optionally cost or margin) across two scenarios (e.g., Actual vs Budget).
• Tag each difference in value based on its origin:
  • Acquired: Revenue from newly acquired entities or businesses.
  • Merged: Revenue from entities that have been merged or restructured.
  • Disposed: Revenue lost due to business disposals.
  • Organic: Net changes in performance from continuing operations.
• Support financial planning, M&A impact analysis, and communication to stakeholders (e.g., how much of revenue growth is attributable to acquisitions vs internal performance).

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