| |
| |
| Preface | |
| |
| |
| Acknowledgments | |
| |
| |
| |
| The History and Evolution of Fair Value Accounting | |
| |
| |
| Why the Trend toward Fair Value Accounting? | |
| |
| |
| History and Evolution of Fair Value | |
| |
| |
| Fair Value Accounting and the Economic Crisis | |
| |
| |
| The FASB and IASB Convergence Project | |
| |
| |
| The Future of Fair Value Measurement | |
| |
| |
| Conclusion | |
| |
| |
| Notes | |
| |
| |
| |
| Fair Value Measurement Standards and Concepts | |
| |
| |
| FASB ASC 820, Fair Value Measurement | |
| |
| |
| Disclosures | |
| |
| |
| Fair Value Option | |
| |
| |
| Conclusion | |
| |
| |
| Notes | |
| |
| |
| |
| Business Combinations | |
| |
| |
| Mergers and Acquisitions | |
| |
| |
| Accounting Standards for Business Combinations-A Brief History | |
| |
| |
| ASC 805, Business Combinations | |
| |
| |
| Other Business Combination Highlights | |
| |
| |
| Subsequent Accounting for Goodwill and Other Intangible Assets | |
| |
| |
| Conclusion | |
| |
| |
| Notes | |
| |
| |
| |
| The Nature of Goodwill and Intangible Assets | |
| |
| |
| History of Intangible Assets | |
| |
| |
| Intellectual Property | |
| |
| |
| Economic Basis of Intangible Assets | |
| |
| |
| Identification of Intangible Assets | |
| |
| |
| Useful Life of an Intangible Asset | |
| |
| |
| Intangible Assets and Economic Risk | |
| |
| |
| Goodwill | |
| |
| |
| Economic Balance Sheet | |
| |
| |
| Conclusion | |
| |
| |
| Notes | |
| |
| |
| |
| Impairment | |
| |
| |
| Evolution of Impairment Testing | |
| |
| |
| Applicable FASB Guidance for Impairment Testing | |
| |
| |
| Accounting for the Impairment of Long-Lived Assets | |
| |
| |
| Goodwill Impairment Testing | |
| |
| |
| Testing Other Indefinite-Lived Intangible Assets for Impairment | |
| |
| |
| Conclusion | |
| |
| |
| Notes | |
| |
| |
| |
| Example of a Qualitative Impairment Analysis-PlanTrust, Inc | |
| |
| |
| Financial Accounting Standards Board ASC 350, Intangibles-Goodwill and Other | |
| |
| |
| PlanTrust, Inc | |
| |
| |
| Notes | |
| |
| |
| |
| The Cost Approach | |
| |
| |
| The Cost Approach under FASB ASC 820, Fair Value Measurement | |
| |
| |
| Economic Foundation for the Cost Approach | |
| |
| |
| Cost versus Price versus Fair Value | |
| |
| |
| The Role of Expected Economic Benefits in the Cost Approach | |
| |
| |
| Reproduction Cost versus Replacement Cost | |
| |
| |
| Components of Cost | |
| |
| |
| Obsolescence | |
| |
| |
| The Relationships among Cost, Obsolescence, and Value | |
| |
| |
| Physical Deterioration | |
| |
| |
| Functional (Technological) Obsolescence | |
| |
| |
| Economic (External) Obsolescence | |
| |
| |
| Applying the Cost Approach | |
| |
| |
| Taxes under the Cost Approach | |
| |
| |
| Limitations of the Cost Approach | |
| |
| |
| Conclusion | |
| |
| |
| Notes | |
| |
| |
| |
| The Market Approach | |
| |
| |
| Measuring the Fair Value of an Entity Using a Market Approach | |
| |
| |
| Conclusion | |
| |
| |
| Notes | |
| |
| |
| |
| Using the Guideline Transaction Method to Measure the Fair Value of a Privately Held (or Thinly Traded) Debt Security | |
| |
| |
| |
| The Income Approach | |
| |
| |
| Discounted Cash Flow Method | |
| |
| |
| Multiperiod Excess Earnings Method | |
| |
| |
| FASB Concepts Statement 7 | |
| |
| |
| Rates of Return under the Income Approach | |
| |
| |
| The Income Increment/Cost Decrement Method | |
| |
| |
| Profit Split Method | |
| |
| |
| Build-Out Method, or "Greenfield Method" (With and Without) | |
| |
| |
| Weighted Average Cost of Capital Calculation | |
| |
| |
| Conclusion | |
| |
| |
| Notes | |
| |
| |
| |
| Advanced Valuation Methods for Measuring the Fair Value of Intangible Assets | |
| |
| |
| Limitations of Traditional Valuation Methods | |
| |
| |
| Real Options | |
| |
| |
| Using Option-Pricing Methodologies to Value Intangible Assets | |
| |
| |
| Black-Scholes Option Pricing Model | |
| |
| |
| Binomial or Lattice Models | |
| |
| |
| Monte Carlo Simulation | |
| |
| |
| Decision Tree Analysis | |
| |
| |
| Conclusion | |
| |
| |
| Notes | |
| |
| |
| |
| The Remaining Useful Life of Intangible Assets | |
| |
| |
| FASB Guidance on Determining the Remaining Useful Life | |
| |
| |
| Considerations in Measuring Useful Lives of Intangible Assets | |
| |
| |
| Guideline Useful Lives | |
| |
| |
| Conclusion | |
| |
| |
| Notes | |
| |
| |
| |
| Fair Value Measurement for Alternative Investments | |
| |
| |
| Investments in Certain Entities That Calculated;Net Asset Value per Share | |
| |
| |
| AICPA Technical Practice Aid | |
| |
| |
| AlCPA Guidance for Determining the Fair Value of Investment | |
| |
| |
| U.S. Private Equity Valuation Guidelines | |
| |
| |
| Fair Value Measurement for Alternative Investment Funds | |
| |
| |
| Conclusion | |
| |
| |
| Notes | |
| |
| |
| |
| Contingent Consideration | |
| |
| |
| Contingent Consideration: Earn-Outs in Business Combinations | |
| |
| |
| Accounting for Contingent Consideration | |
| |
| |
| Conclusion | |
| |
| |
| Notes | |
| |
| |
| |
| Measuring the Fair Value of a Loan Guarantee | |
| |
| |
| The Jordan Lee Fund Guarantee of Townsend Farm Development, LLC | |
| |
| |
| Notes | |
| |
| |
| |
| Auditing Fair Value Measurement | |
| |
| |
| Auditing Standards | |
| |
| |
| Audit Standards for Fair Value Measurements and Disclosures | |
| |
| |
| The Audit Process | |
| |
| |
| Auditing Estimates in Fair Value Measurements | |
| |
| |
| AU 328, Auditing Fair Value Measurements and Disclosures | |
| |
| |
| PCAOB Staff Audit Practice Alert No. 2 | |
| |
| |
| PCAOB Staff Audit Practice Alert No. 9 | |
| |
| |
| SEC Audit Guidance | |
| |
| |
| AICPA Non-Authoritative Guidance | |
| |
| |
| The Appraisal Foundation | |
| |
| |
| Conclusion | |
| |
| |
| Notes | |
| |
| |
| |
| Auditing a Business Combination or a Step 2 Impairment Test | |
| |
| |
| General | |
| |
| |
| Income Approach | |
| |
| |
| Cost Approach | |
| |
| |
| Market Approach | |
| |
| |
| |
| Auditing a Step 1 Goodwill Impairment Test | |
| |
| |
| General | |
| |
| |
| Income Approach | |
| |
| |
| Market Approach | |
| |
| |
| |
| Survey of Fair Value Audit Deficiencies | |
| |
| |
| Audit Deficiencies Increase in Difficult Economic Times | |
| |
| |
| PCAOB Inspections | |
| |
| |
| Methodology | |
| |
| |
| Description of a Deficiency | |
| |
| |
| Audit Deficiency Trends | |
| |
| |
| FVM Deficiencies | |
| |
| |
| Impairment Deficiencies | |
| |
| |
| Conclusion | |
| |
| |
| Notes | |
| |
| |
| |
| Fair Value Measurement Case Study | |
| |
| |
| Learning Objectives | |
| |
| |
| Business Background and Facts-Mobile Apps Source, Inc | |
| |
| |
| Note | |
| |
| |
| |
| Suggested Case Study Solutions | |
| |
| |
| Information Request-ASC 350 | |
| |
| |
| Information Request for Business Combination-ASC 805 | |
| |
| |
| Glossary of International Business Valuation Terms | |
| |
| |
| Bibliography | |
| |
| |
| About The Author | |
| |
| |
| Index | |