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