LBO - Financing Fees and Calculating PF Goodwill
Been working with a few practice models with a friend and have seen a coupe different ways of handling financing fees on the balance sheet. Looking for clarification on how to generally approach modeling these fees. Below is what we have seen:
In one model, it is specified that 50% of total financing fees are amortized. That considered, the non-amortized financing fees are added back to reach PF Goodwill in the answer. The other half are then capitalized and amortized on the assets side on the B/S.
However, in another model. The analyst included financing fees in calculating the required equity investment, subtracts financing fees in calculating PF Goodwill, as well as capitalizes and amortizes the fees to the assets side of the B/S.
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