Value Measurement for Accounting – Financial Reporting Requirements
Proper application of generally accepted accounting principles often calls for significant changes to the way that accounts must be prepared and presented, requiring a wider range of assets to be valued on an annual basis. Now, more than ever before, financial reporting is emphasizing the quality of company balance sheets and the assets set forth therein.
Many companies can no longer rely on internally-produced valuation reports for financial reporting purposes. Our business valuation professionals can provide the independent valuation opinions required for today’s financial reporting requirements.
Our professionals stay current on the latest pronouncements and guidance produced by the relevant regulatory authorities such as the Financial Accounting Standards Board (FASB), International Financial Reporting Standards (IFRS) and the Securities and Exchange Commission (SEC), such as:
- IFRS changes the accounting treatment for acquisitions. All assets (tangible and intangible) from a merger or acquisition now have to be included in the balance sheet of the acquirer at their current market value and are depreciated over their useful economic life.
- Goodwill is tested for impairment annually, and is marked down according to the conclusions of that annual process.
- A range of financial assets need to be valued under IAS, including financial instruments and insurance contracts. IFRS requires share options to be valued as they are charged against the profit and loss account on an annual basis.
These considerable changes call for specialized valuation services provided by professionals that understand the specific accounting implications, as well as the wider commercial context in which those accounting valuations will apply. Our team’s business valuation expertise, in collaboration with the professionals in our firm’s Assurance & Advisory Services Group, can provide valuation solutions to meet all of your financial and accounting needs.
Additionally, because the Sarbanes-Oxley Act prevents firms from preparing valuations for companies for which they provide attest services, we work cooperatively with other regional and national accounting firms, to prepare independent business valuations for a wide array of financial reporting applications.