Corporate Advisory & Restructuring Services - Grant Thornton LLP

At its core, Fresh Start Accounting is much
more than an accounting exercise. The Fresh
Start Accounting service is broken into four
phases:
Assessment – Define the scope and
develop the plan for accounting for the
emergence.
Review the Plan of Reorganization.
Review the capabilities of a Company’s
general ledger and sub-ledgers and
understand any complexities that may affect
the program for Fresh Start.
Review every account on a company’s trial
balance to determine need for valuation
procedures.
Review tax issues for each entity, including
local, state, federal and any foreign statutory
requirements.
Development of implementation
procedures – Based on the results of
Phase 1, creating the necessary
information and adjustments to
support the emergence.
Identify financial adjustments required to
record the Effects of Plan and the
anticipated impact on the general ledger.
Perform valuation of assets and liabilities of
every entity within a company’s structure (all
Debtors and non-Debtors are revalued in a
Fresh Start scenario), and establish new
balance sheet values, including goodwill.
Design and test processes and plans for
making adjustments in the accounting
systems, including preparing for a possible
mid-year close and making changes to
carrying values and useful lives.
Assist with preparation of preliminary
journal entries and documentation to
support the emergence transactions, and
review them with a company’s auditors to
ensure buy-in and understanding.
Implementation – Prepare the required
adjustments to be made by the
company.
Assist management with adjustments to
financial records, including “push-down” of
Plan Effects and Fresh Start Accounting to
subsidiaries.
Review impact of consolidation and
elimination entries to ensure consolidated
opening financials are in accordance with
Plan of Reorganization.
Assist with preparation of opening financial
statements, any required reporting and
financial statement disclosures.
Follow-up – Assist management on an
as-needed basis.
Finalize valuation adjustments and
allocations.
Participate in discussions with a company’s
auditors to ensure appropriate understanding
of accounting adjustments, emergence
financials, and supporting documentation.
Continued tax review, structuring and
planning, including:
Post-emergence tax planning (year
end cut-off, deconsolidations, forced
consolidations)
Entity tax withdrawal consulting (for
liquidated entities)
Reporting tax implications on postemergence
tax returns and analyzing
state tax implications
Assisting in the withdrawal of debtor
entities from state, local and foreign
jurisdictions upon liquidation
Representative clients for whom we
have provided Fresh Start
Accounting Services include:
Automotive Parts Supplier
Provided day to day oversight of the Firm
and client teams responsible for valuation
and tax adjustments.
Determined applicability of Fresh Start based
on the criteria set forth in ASC 852.
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