Financial reporting plays a pivotal role in today’s investment world. Financial reporting rules protect the investing public, subjecting businesses to greater scrutiny than ever before.
The Value Management Inc. team has hands-on experience with valuations for financial reporting purposes. Strictly adhering to the AICPA Accounting Standards Codification (“ASC”), Value Management Inc. provides valuations for goodwill impairment (Topic 350), privately-held company equity securities (ASC 718) and purchase price allocations (ASC 805). Value Management Inc. works with the audit team throughout the process to discuss and resolve any issues that might arise.
ASC 350 requires goodwill and other indefinite lived asset impairment testing at least annually (or more frequently should a company’s circumstances warrant). First, the fair value of the enterprise is determined. Next, the fair value of the assets (tangible and intangible) are subtracted from and the fair value of the liabilities added to the enterprise value. The value remaining is compared to the goodwill recorded on the company’s balance sheet. If the carrying value of the goodwill exceeds the residual value, no impairment has occurred.
ASC Topic 718 requires that the fair value of stock based compensation be recognized in financial statements to provide investors with more complete and neutral financial information. Value Management Inc. has extensive experience in valuing stock options to ensure compliance with financial reporting.
A merger or acquisition triggers the need for a valuation under ASC Topic 805. Here, the purchase price is allocated among all of the tangible and intangible assets. Tangible assets include working capital, machinery, equipment and real property; intangible assets can include customer relationships, technology, trade names, etc. Value Management Inc. is well versed in preparing allocations which satisfy the requirements of ASC 805.
Value Management Inc. has extensive experience in financial reporting valuations. Our team is up to date on the current standards and best practices and has the knowledge to prepare financial reporting valuations that will meet your audit standards.