Accounting Matters

The IPO window is reopening. M&A is picking back up. And a backlog of PE-backed companies that delayed exits in 2022 and 2023 are now under real pressure to move. Adam Olsen and Nicole Harger break down the dual-track exit, the strategy of running an IPO process and an M&A process at the same time, and what's driving renewed interest in it right now.

This is part one of a two-part series. Part two goes operational: what the CFO and finance organization need in place, and how far in advance.

In this episode:

• What a dual-track exit actually is, and why running both processes simultaneously creates leverage that neither path generates on its own
• Who uses this strategy: PE-backed companies remain the dominant profile, but corporate carve-outs and growth-stage companies are increasingly exploring it too
• Why most dual-track processes end in M&A, and why that's often the intended outcome rather than a failure of the IPO track
• The market backdrop heading into summer 2026: improving conditions, a buildup of past-hold-period PE portfolio companies, and a more disciplined IPO market than 2020-2021
• Inside the IPO track: the S-1 process, the three-year audited financial statement requirement, PCAOB auditor considerations, carve-out accounting complexity, and realistic 12-18 month preparation timelines
• Inside the M&A track: the CIM process, strategic versus financial sponsor buyer dynamics, quality of earnings diligence, the working capital peg negotiation, and the gap between signed LOI and close
• Why the financial rigor required for IPO readiness is the same rigor that protects valuation in an M&A process, and why there's no shortcut on either side

In May, the SEC proposed two of the most significant changes to public company reporting in decades: a full restructuring of the filer status framework and an optional off-ramp from quarterly reporting. Adam Olsen and Nicole Harger break down what's actually in both proposals and what finance leaders should be doing while the comment window is still open.

In this episode:

• How the filer status framework drifted over 20 years, and why the SEC is collapsing five categories down to two: large accelerated filer and non-accelerated filer
• The new $2 billion threshold (up from $700 million) and the two-year measurement lock that gives companies near the line real visibility before a status change hits
• What non-accelerated filer status actually means: the 404(b) audit attestation exemption, scaled-back executive compensation disclosure, and the new opt-up flexibility to voluntarily keep stricter requirements
• The five-year mandatory on-ramp for newly public companies, and how it changes IPO readiness planning and S-1 financial statement requirements
• The companion semi-annual reporting proposal: the new Form 10-S, what stays the same (8-Ks, earnings releases), and why market practice may not shift even if the rule does
• Practical complications to watch: credit agreement covenants, underwriter comfort with older financials, exchange listing requirements, and the audit committee conversation around what fills the gap if 404(b) goes away

The deal announcement is just the beginning. In Episode 2 of their two-part series, Embark's Nicole Harger and Adam Olsen get into the accounting and reporting mechanics that determine whether a de-SPAC actually succeeds on the other side of closing. The complexity surprises even experienced finance teams. This episode is the preparation they wish they'd had.

In this episode:

• What public company readiness actually means for a private target, and why the de-SPAC process tests it rather than creates it
• PCAOB audit requirements, Reg S-X compliance, and the finance function capacity demands that can't be built during the transaction
• The accounting acquirer determination under ASC 805: why the legal acquirer and the accounting acquirer are often different entities, and why it matters
• How redemption scenarios can flip the accounting acquirer conclusion, and what that means for pro forma financial statements
• Reverse recapitalization mechanics: no goodwill, no fair value step-up, and why the operating company's history becomes the combined entity's history
• Warrant classification under ASC 480 and ASC 815-40: the 2021 restatement wave, what triggers liability classification, and the quarterly income statement consequences that follow
• Earnout accounting: when it's compensation under ASC 718, when it's contingent consideration, and how liquidity event triggers can create mark-to-market exposure
• The Form S-4/merger proxy, the Super 8-K's four-business-day clock, and why that deadline has no exceptions
• ICFR obligations post-closing: why de-SPAC companies don't get the newly public company grace period, and what that means for the first annual report

If you haven't listened to Episode 1 yet, start there. The deal structure decisions covered in Episode 1 and the accounting consequences covered here are more connected than they might seem.

SPACs are back. The numbers make it hard to argue otherwise. In Episode 1 of their two-part series, Embark's Nicole Harger and Adam Olsen unpack what's driving the resurgence, what went wrong in 2021, and what CFOs and finance leaders actually need to know before they consider this path.

In this episode:

• What a SPAC is and how the three-phase lifecycle actually works, from IPO to business combination
• The full equity instrument landscape: founder shares, warrants, PIPE financing, and earnout arrangements, and why the headline deal value is never the complete picture
• Why the 2020-2021 SPAC boom collapsed, and how the SEC's 2024 rules changed the calculus
• What's fueling the current resurgence and why PE-backed companies are at the center of it
• SPAC vs. traditional IPO: the real trade-offs on speed, valuation certainty, cost structure, and projections
• The three most common mistakes companies make going into a de-SPAC, including the one that shows up in almost every SEC filing review
• Why public company readiness isn't a post-closing project, and what that preparation actually requires

Episode 2 goes deep on the accounting and reporting mechanics. If you're close to a de-SPAC transaction or think you might be, it's worth your time.

Hyperscalers are pouring hundreds of billions into AI this year. Mid-market companies are right behind them, spending hundreds of thousands to millions on their own AI initiatives. Different scale, same accounting headache.

Adam Olsen and Nicole Harger break down how to actually account for AI development costs, and why the playbook finance teams have used for traditional software doesn't map cleanly onto this technology.

In this episode:

• Why framework selection comes first: internal-use software (ASC 350-40), externally marketed products (ASC 985-20), and pure research (ASC 730) all carry different capitalization rules
• The three-stage model under ASC 350-40 and why AI's iterative development cycle makes stage-tracking harder than it looks
• Data costs: the most overlooked, most material line item, and the "alternative future use" judgment that determines its treatment
• ASU 2025-06: FASB's principles-based overhaul of internal-use software accounting, and the new "significant development uncertainty" concept that changes when AI projects can start capitalizing
• What this all means for budgeting, useful life assumptions, build-vs-buy decisions, and the auditor conversation

The risks keeping CFOs up at night aren't new. But the way they connect, accelerate, and amplify each other is. In the final episode of their three-part GRC series, Embark's Adam Olsen and Managing Director Allison Bradshaw break down the risk landscape organizations are navigating right now, and what it actually takes to get ahead of it.

In this episode:

• AI governance frameworks: how to build tiered oversight proportional to risk, from chatbots to credit decisions, without slowing down adoption
• The "black box" problem: why explainability and transparency are now regulatory expectations, not just best practices
• Cybersecurity as enterprise risk: how to reframe board conversations around cyber exposure and what ransomware preparedness actually requires
• Identity, access, and the human element: why phishing remains the most common attack vector and what effective security culture looks like beyond annual training
• Data privacy in a fragmented regulatory environment: GDPR, CCPA, and the state-by-state patchwork, plus why privacy and cybersecurity programs are stronger when built together
• Third-party and vendor risk: how to apply a risk-based approach across a complex vendor ecosystem, including fourth-party exposure and ESG considerations in the supply chain
• The regulatory change problem: AI regulation, SEC cyber disclosure rules, ESG reporting requirements, and how to build compliance capabilities that don't start from scratch every time
• Why integrated risk management isn't optional: how AI, cyber, privacy, and regulatory risks connect in ways siloed functions will always miss

To connect with Allison or learn more about how Embark approaches GRC, visit embarkwithus.com.

Most GRC functions were built a decade ago in response to SOX or a single risk event. The world has changed. The function often hasn't. In this episode, Embark's Adam Olsen is joined by Managing Director Allison Bradshaw to break down what it actually takes to modernize governance, risk, and compliance for the environment organizations are operating in today.

In this episode:

• Why siloed GRC functions create blind spots, audit fatigue, and hidden costs that far exceed what shows up on a budget line
• What an integrated GRC model looks like in practice: common risk taxonomy, shared technology, and coordinated activities across all three lines of defense
• How to make the business case for modernization, including the 20 to 30 percent cost reduction organizations typically see when duplication is eliminated
• Technology enablement beyond the platform: continuous controls monitoring, workflow automation, and real-time integration with your ERP and source systems
• How modern GRC transforms SOX from a seasonal sprint into a year-round process, with a real-world example of an $800K compliance budget getting restructured
• Where AI fits into GRC today: risk identification, anomaly detection, and compliance monitoring, plus the governance frameworks organizations need to manage AI as a risk in its own right
• What a risk-intelligent culture actually looks like, and why most GRC transformations fail on culture long before they fail on technology
• How to start without boiling the ocean: practical guidance on sequencing a GRC modernization roadmap

To connect with Allison or learn more about Embark's GRC maturity assessment, visit embarkwithus.com.

Most internal audit functions are still operating like it's 2010. In the first episode of Embark's new GRC series, Adam Olsen is joined by Allison Bradshaw, Principal and head of Embark's GRC and Internal Audit Services practice, to make the case for a fundamentally different model. The conversation covers what modern IA looks like, how to build the right delivery structure, and how CFOs can measure real return on investment.

In this episode:

• Why compliance-checkbox IA is leaving significant value on the table, and what a risk-based, consultative function looks like instead
• Co-sourcing vs. outsourcing: a practical framework for deciding which model fits your organization's size, complexity, and risk profile
• How data analytics and AI are shifting IA from sampling transactions to testing entire populations in near-real time
• The emerging demand for IT audit, cybersecurity, and AI governance capabilities, and why most teams can't hire for all of it
• A framework for measuring IA ROI: prevented costs, recovered value, process improvements, and stakeholder confidence
• A real-world co-sourced engagement example where a single year yielded over $1.6M in identified losses and fraud

Understanding DISE is one thing. Actually producing the disclosure every quarter is another. In the final episode of their three-part series, Embark's Nicole Harger and Adam Olsen are joined by David Bushby, who brings real-world perspective from working directly with public companies on DISE implementation. If your team is asking "where do we even start," this episode is the answer.

In this episode:

• How to conduct a readiness assessment and gap analysis before your 2027 effective date
• Who needs to be in the room: why finance, IT, HR, procurement, and operations all have a role
• Key decisions to make early: cost-incurred vs. expense-incurred, selling expense definition, and voluntary disclosures
• Systems and data challenges: fragmented ERPs, the retail inventory method, cost pools, and how to use estimates responsibly
• Internal controls for a new disclosure: what needs to be in place before your first filing
• How DISE interacts with segment reporting under ASC 280 and what to address in MD&A
• Industry-specific pain points for retail, consumer products, manufacturing, life sciences, and tech
• Six practical tips for first-year adoption, including why running a pilot in 2026 could save you significant headaches

If Episode 1 covered the "why" behind DISE, Episode 2 is where theory meets practice. Embark's Nicole Harger and Adam Olsen get into the technical details of all five required natural expense categories, working through the tricky classification questions companies are already bringing to their teams. This is the episode to bookmark when your client asks, "But where exactly does that go?"

In this episode:

• The difference between natural and functional expense classification, and why it matters for your disclosure
• Purchases of inventory: what's included, what's excluded, and how intercompany transactions and inbound freight factor in
• Cost-incurred vs. expense-incurred basis: what each means and why most companies will elect cost-incurred
• Employee compensation: the ASC 718 definition of "employee," how to handle contractors and leased workers, and a practical approach to mixed workforces
• Depreciation and intangible asset amortization: how to handle finance lease ROU assets, internal-use software, and the costs that look like amortization but aren't
• DD&A for extractive industries, plus special considerations for asset-related costs, liability-related expenses, and reimbursement arrangements
• How to define selling expenses for your business, and why that definition has to hold up over time