Assuming
1. One owner, owns 100%.
2. Wants to sell 100% of the business and walk away with cash from IPO.
What is the accounting treatment?
cash hits CFF ---> BS and SE increases by same right after the IPO.
Then?
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I've never fathomed what you're describing. Owner sells 100% to public shareholders with employees and management retaining nothing? Yikes
It sounds like you're selling secondary shares, so the cash goes directly to the shareholders. There is no cash flow to the company, so no addition to the balance sheet.
In reality this would never happen but I'd look at it as essentially an M&A deal. If there's no debt being retired or thrown on the BS (not an LBO), and all equity raised went straight to the seller it would't hit the financials. I don't know what you'd do with the transaction fees.
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