The New, Complicated World of Accounting for SPACs

Special Purpose Acquisition Companies (SPACs) quickly emerged as a hot trend of 2020, but they are also taking heat under new SEC scrutiny and increasingly complex accounting requirements.

SPACs are not a new concept, but have boomed recently as they simplify and accelerate the process of going public.  But as of late, there have been hurdles to overcome for SPACs, both on the operational and regulatory fronts.

We can assist with a number of specialized services throughout every stage of the SPAC lifecycle.  The SEC recently issued guidance that will have dramatic accounting implications for SPACs, including changing the classification of warrants from equity on the balance sheet to a liability.  UHY is actively assisting companies in complying with the new SEC guidance. 

To assist both SPAC sponsors and target companies, UHY has assembled a team of advisors to help navigate the changing environment.  Below are the major stages of the SPAC lifecycle, along with the technical expertise available to SPAC sponsors and target companies. 

Pre-IPO

• Assessing the scaling up of people, process and technology needed for the transaction
• Providing bookkeeping services throughout the entire transaction including entering transactions, making journal entries, performing account reconciliations and performing monthly close procedures
• Preparing financial statements and related footnote disclosures, including compliance with changing SEC guidance
• Providing audit support services
• Preparing financial information to be included in the S-1
• Completing management’s discussion and analysis
• Drafting technical accounting memos
• Responding to SEC accounting comments

Post-IPO

• Providing bookkeeping services throughout the entire transaction including entering transactions, making journal entries, performing account reconciliations and performing monthly close procedures
• Managing SEC filing requirements, including Form 10-Qs and Form 10Ks

De-SPAC

• Preparing pro-forma information to be included in the Proxy, S-4, or Super 8-K.
• Providing technical research and analysis, including business combination accounting
• Assisting the target company prepare financial statements in accordance with U.S. GAAP

In today’s dynamic marketplace, SPAC sponsors and target companies are relying on UHY to help them through the complex transaction process. 

Please complete the form to the right to direct your questions directly the UHY SPAC team.