What it is
Pro forma statements show what the financial statements would have looked like had a transaction, such as an acquisition, a financing or a disposition, already occurred. The workbook sets the registrant and the target side by side, posts adjustments from two journals and produces a pro forma balance sheet and income statement, with pro forma earnings per share. Balance sheet adjustments must balance; income statement adjustments are one-sided movements on statement lines, with the tax effect entered as its own adjustment.
The structure follows Article 11 of Regulation S-X: the pro forma balance sheet is as of the end of the most recent period for which a balance sheet is required, the income statements assume the transaction occurred at the beginning of the fiscal year presented, and transaction accounting adjustments depict the accounting required by U.S. GAAP. A nonissuer preparing information for a lender or investor can use the same layout. This is the preparer’s schedule; a practitioner’s compilation or examination is a separate engagement.
When to use it
- Acquisition, merger or recapitalization support for a lender, investor or board.
- Preparing the schedules behind pro forma information in an offering or an SEC filing.
- Compilation of pro forma financial information (AR-C 120), as the management schedule.
What’s inside
- Pro forma balance sheet: registrant, target, combined, adjustment debits and credits, pro forma, balance checks
- Pro forma income statement for the period presented with the same layout and per-share amounts
- Balance sheet adjustment journal with entry balance and account match checks
- Income statement adjustment journal for amortization, interest, transaction costs and tax effect
- Examples of typical entries and tie-outs from each journal to its statement
Standard cited
This template follows Reg. S-X Article 11; AR-C 120; AT-C 310. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
What dates does Article 11 use?
Under 17 CFR 210.11-02, the pro forma balance sheet is as of the end of the most recent period for which a consolidated balance sheet is required, unless the transaction is already reflected in it. Pro forma income statements assume the balance sheet adjustments were made as of the beginning of the fiscal year presented.
What are Transaction Accounting Adjustments?
Adjustments that depict the accounting for the transaction required by U.S. GAAP. Management’s Adjustments for synergies and dis-synergies are optional, need a reasonable basis and appear in the explanatory notes as a reconciliation of pro forma net income; per-share amounts on the face of the statement reflect only the required categories.
Why are the income statement adjustments not balanced entries?
Each adjustment moves a statement caption as if the transaction had been in place for the whole period. The offsetting balance sheet effects are shown at the transaction date on the balance sheet, so the income statement journal has no balance requirement. The workbook checks that pro forma net income equals combined net income plus the adjustments.
Does the workbook compute diluted earnings per share?
No. It divides pro forma net income by the pro forma weighted average shares you enter. Diluted amounts need the dilutive securities and the treasury stock or if-converted calculations, which belong in a separate schedule.
Related templates
- Consolidation and Elimination Workbook (ASC 810)
- Equity Rollforward Template (Corporation and LLC)
- Financial Statement Shell: Balance Sheet, Income, Equity and Cash Flows
- Income Tax Provision Workbook (ASC 740)
Last updated 11/05/2026. All free templates.