#1
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Insurance Sub Acquisition Cost
Non-Insurance Holding Co "A" acquired an insurance Co "B" regulated by NYDFS on December 1st, 20xx. Prior to the close, Co "A" incurred some expenses associated with the acquisition such as:
1. legal fees connected with funding of the deal 2. legal fees connected with state approvals 3. legal fees connected with post-acquisition compliance of the newly acquired Co "B" 4. IT development costs associated with product development to be offered by Co "B" post-acquisition. Can any of these costs be charged and reported on the Co "B" books even though they were incurred prior to the close date? In my opinion, #3 and #4 definitely belong to Co "B", and #1 and #2 might need to be reported at the holding Co "A"? Thanks! |
#2
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Hello Nina,
Unfortunately, we are not familiar with state specific rules and regulations such as the the NYDFS. Depending on materiality you may want to discuss with the NYDFS or your outside auditors. Regards, Lisa Mullen |
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acquisition costs |
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