Mergers are more complex than they might seem at first glance. Experts Erik Mellgren and Mattias Elfgren emphasize that thorough preparation and attention to detail are crucial for a smooth merger process.
– Essentially, a merger is about transferring numbers from one company to another. Success lies in having control over the details and a clear structure for execution, says Erik Mellgren, corporate accounting consultant at Tiego.
Read more about Erik and Mattias' reflections on FAR: https://www.far.se/kunskap/redovisning/sa-gor-du-fusionsprocessen-smidigare/
There are different types of mergers, where an upstream merger is the most common. This means that a subsidiary's entire assets, liabilities, and equity are taken over by the parent company. At the same time, the subsidiary is dissolved without liquidation.
Mattias Elfgren, CEO at Tiego, adds that a clear structure in account management can save a lot of time. – Don't be afraid to create new accounts when needed; if you lump balances together on shared accounts, it can complicate later reconciliations and traceability.
– Another important thing to keep track of is intercompany debts and receivables. These should preferably be settled before the merger date. It's important to remember that the merged company actually ceases to exist on the merger date itself.
Four Tips for a Company Merger
1. Read the Swedish Accounting Standards Board's guidance and the examples provided.
2. Settle and reconcile all intercompany transactions between the companies before the merger date. Make sure all parties agree on the amounts.
3. Create a detailed chart of accounts with one-to-one matching between the companies. Don't be afraid to create new accounts rather than lumping balances together.
4. Document the process so that there are checklists and run sheets to reuse next time.