When consolidating a set of accounts after an acquisition There are a number of effects that happen because of the transaction itself Financing the transaction causes lots of those effects and they are summarized in a sources and uses of funds table So let's go through them, firstly we look at the uses of funds our first one is to actually purchase the equity of the target How else do we use our funds though? We also might retire the targets debt Okay, so add all that up, let's say it comes to 180 (my uses of funds) Where am I going to get that 180 from? What are my sources? Well firstly we might use balance sheet cash that we've got on our balance sheet prior to the acquisition Second of all, we might do an equity issuance and lastly the remainder might come from a new debt issuance So we raise 180 (that's our sources of funds) and then we spend it 180 Each of those 5 items will have a transaction effect in our balance sheet consolidation after acquisition