Calendarization of Balance Sheet?
Hey guys, I am currently working on consolidating two companies' balance sheets. Company A's balance sheet ends on March 31st, and Company B's balance sheet ends on April 30th. Should I just add them up together and make a foot note of the different dates? Calenderization of a Balance Sheet doesn't make sense to me as it is a snapshot of the financials at a certain period of time, unlike the Income Statement.
When does the parent’s fiscal year end? Assuming Company A is the parent, you can pull Company B’s balance sheet for 3/31 and then consolidate with Company A’s balance sheet.
Parent's (Company A) fiscal ends on 3/31. Company B's fiscal year ends on 4/30. Company B doesn't have any balance sheet data that ends on 3/31. Should I just add up the 3/31 and 4/30 balance sheets?
If its all you have then I suppose you can just combine them.
The only thing I would say is if there is any type of seasonality in your business this might not be an accurate view of a normalized bs. But not really sure what you're trying to do here.
Depending on the industries the companies are in I'd imagine seasonality doesn't really make much of an impact in March / April.
Perhaps there's some flux due to 1Q / 2Q differences but in my experience most seasonality differences are seen winter vs summer / in-season vs off-season (travel / hospitality) / 3Q v 4Q (holiday / Christmas travel and general spend).
Agreed though if there's nothing more to work with you can just combine them.
Interested in hearing views on this. I have the same issue in merger modelling where fiscal period ends do not align for the balance sheet. What are you supposed to do because ideally the balance sheets should be at the same point in time?
Just footnote it I guess. Unless you want into quarterly stub stuff ie take 2/3rd of the change of that quarter. Should be more accurate but not quite exact, especially if there is seasonality so eitherway you’ll be close but not quite
I'd go with what everyone else is saying and add them up and footnote it. If you have access to other historical balance sheets, try and see if the company does have any seasonality to it, but it's likely not going to swing that much in a month.
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