Search Fund Capitalized Software (ASC 350-40) Solver

Underwrite analyzing engineering timesheets and internal software capitalization rates to reclassify capitalized R&D wages back into operating expenses for true cash EBITDA.

Reported Capitalized R&D & Multiples

EBITDA Normalization & Valuation Impact

Required Pre-Close EBITDA Overstatement Reduction
$416,000 Annual EBITDA Reduction
Implied Enterprise Valuation Reduction (Purchase Price Cut)
-$2,912,000 Purchase Price Reduction
Normalized True Operating Engineering Expense
$416,000 Cash Opex Expensed
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