Transaction accounting support for a telecom tower company
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Case Study
Transaction accounting support for a telecom tower company
One of the largest telecom tower company in the Middle East.
Challenges faced by the client
- Pursuant to the carve-out of 14,000+ towers from the parent company, they required support with the following:
- Accounting implications of the transaction e.g. business vs. asset acquisition, accounting for sublease and IFRS 16 vs. IFRS 15 assessment for the customer contracts with telcos.
- Assess and review the IFRS 16 tool, including performing UAT.
- Reconciliation of the sublease data and IFRS 16 values with the head leases held by the parent.
- More recently they required help with financial reporting for their acquisitions in Pakistan and Europe including accounting policy alignment on matters such as IFRS 15 vs IFRS 16 assessment, ARO and IFRS 16 calculations for land leases.
Our team's role
The scope of the work included:
- Pre-deal support to assist with the accounting considerations arising from the transaction.
- Assistance with reviewing the leasing tools and suggesting if the requirements of IFRS 16 are met.
- Supported with reconciliation of the lease data, including accounting for the differences noted and conducting need-based discussions with the auditors and senior management.
The value our team added
- Based on the group's existing knowledge and sector experience alongside IFRS 16 tools, our team helped the company achieve timely closure of the transaction and implementation of the IFRS 16 tool, including reconciliation of the data. This assisted the company with accurate financial and management reporting.
- As part of our support for the company’s recent acquisitions in Europe and Pakistan, our involvement helped with timely closure of the audit for the year ended 31 December 2023 which was the first annual reporting period post the acquisitions. We participated in discussions with the auditors of the subsidiaries as well as the group auditors on technical accounting matters around accounting policy alignment and related quantification.
