A step-up, in acquisition accounting (IFRS 3), is the revaluation of acquired assets from their historical book values to their fair values at the acquisition date — the difference being amortised over the assets' useful lives, reducing post-acquisition reported net income without affecting cash flows. In tax contexts, a fiscal step-up is the recognition of latent capital gains on restructuring, which may create future tax-deductible amortisation. In due diligence, existing step-ups from prior acquisitions affect the target's depreciation charge and reported earnings.

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Example: in the PPA following a Swiss industrial group acquisition, production equipment has a book value of CHF 4.0 million and a fair value of CHF 6.5 million. The CHF 2.5 million step-up is amortised over 8 years in IFRS consolidated accounts — generating CHF 312,500 of additional annual amortisation that reduces consolidated net income without any cash flow impact.

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Hectelion calculates step-ups in PPA mandates and analyses their fiscal implications in Franco-Swiss restructuring transactions.