The deal cooked up by Martha Stewart Living Omnimedia to acquire some of the business units run by celebrity chef Emeril Lagasse is a rich concoction. On Monday, MSLO agreed to fork over $50 million in cash and stock for Emeril’s non-restaurant businesses, which include cookbooks, television shows, and merchandising units.

The New England-born Lagasse, who first made a name for himself as a New Orleans chef and restaurateur, along with other key partners, will receive $45 million in cash and $5 million in MSLO shares. MSLO spiced up the deal with a lucrative earnout, that could reach $20 million if Lagasse and company meet specific profit goals by 2012.

While there is no evidence that the deal will stall, the transaction provides a good illustration of how the new merger and acquisition accounting rule, known as FAS 141(R), could affect future deals. The new rule presents a “huge valuation challenge,” posits Jay Hanson, national director of accounting for audit firm McGladrey & Pullen. Here’s why.

An earnout is an incentive offered to key employees of a target company to entice them “to stick around and drive value,” explains Hanson. Essentially, if the target company hits profit goals set by the buyer, the individuals “get a big piece” of the profit. In the case of Lagasse and his partners, the deal is typical, says Hanson.

If the Emeril businesses generate average earnings (before interest, taxes, depreciation, amortization, and non-cash equity compensation) equal to or greater than $10.25 million during the two-year period ending December 31, 2012, the earnout payment will be $9 million, plus $4.00 for every $1.00 the average EBITDA exceeds the goal. The earnout is limited to $20 million according to the regulatory documents filed by MSLO.

There are several strategic business reasons the deal should close before year’s end. But one accounting issues looms large: to avoid having to meet FAS 141(R) requirements. The new rules applies to transactions that occur in fiscal years beginning after December 15, 2008.

Under the current FAS 141, contingent considerations — which include earnouts — are estimated if they are determinable, and recorded on the buyer’s balance sheet when the payout is made in the future. In addition, the future earnout is added to the buyer’s goodwill at the time of the payout, and earnings are adjusted up or down accordingly, depending on whether the addition of the earnout payment shows that the buyer paid too much for the target, or got it at a bargain price.

However, under the revised rule FAS 141(R) buyers must determine the estimated fair value of the future earnout on the day of the sale, and record it as part of the purchase price. Any difference between the estimated fair value and the actual payout is recorded as an expense or gain.

Hypothetically, that means that if MSLO decided to wait until January 2009 to close the deal, the company would have to value the potential $20 million earnout at its fair value on the sale date. That’s a “perplexing dilemma,” says Hanson, because it requires accountants and valuation experts to estimate the value of the earnout, when the individuals closes to the deal — the buyer and seller — can’t agree on an answer. “That’s why the deal is structured with an earnout,” asserts Hanson. “The buyer and the seller are agreeing to share the risk of success. Essentially, the buyer is saying ‘I will pay if you can deliver.'”