Pro Forma Financial Statements

Definition

Financial statements that present historical or projected financial information adjusted to reflect a specific transaction, event, or set of assumptions as if it had already occurred. In M&A, pro forma financials combine the acquirer's and target's results, incorporate purchase price allocation adjustments, and eliminate intercompany transactions to show the post-combination financial position. Pro forma presentations are required in prospectuses, fairness opinions, and regulatory filings for material transactions.