Business Combinations with SFAS 141R, 157, and 160: A Guide to Financial Reporting
by Michael J. Mard, Steven D. Hyden, Edward W. Trott
Mike Mard, CPA/ABV, ASA, current member of the FASB Valuation Resource Group, Ed Trott, former FASB Board Member and Steve Hyden, CPA/ABV, ASA have written a guide to assist CFOs, controllers, and auditors with meeting the new requirements of reporting on business combinations.
For valuation analysts, it’s the look from the “other” side of these types of analyses, from the point of view of those who use and rely upon valuations of assets. This is a view that valuation analysts need to present and defend their work.
This guide provides specific guidance for proper interpretation of the Financial Accounting Standards Board (FASB) statement of SFAS 141R, Business Combinations, SFAS 157, Fair Value Measurements, and SFAS 160, Noncontrolling Interests in Consolidated Financial Statements.
The guide includes a SFAS 157 flowchart, a checklist for implementing the standard, a SFAS 157 worksheet, supplemental checklists for intangible assets, and insight from FASB’s Valuation Resource Group discussing some 35 areas of discussion. It will be an invaluable tool for valuation analysts in understanding and implementing these complicated standards.
“This Guide will be of immense value to anyone who actually has to perform a Purchase Price Allocation. The authors start with the FASB's own Statements. They then explain the language in the Statements in a way that will allow the reader to meet the actual requirements. The Guide ties in particularly well with the authors' recent previous work in "Valuation for Financial Reporting", 2nd edition. With these two references, most of the mystery has been removed for appraisers trying to figure out what FASB actually meant when they wrote the Standards. Recommended unreservedly.”
Alfred M. King, Vice Chairman, Marshall & Stevens
“FASB guidance is not very explicit in telling accountants how to make fair value measurements leaving interpretation up to preparers, auditors, and valuation specialists. In this text, the authors –a former FASB board member and two valuation specialists -- give firms their interpretations of FASB literature of how to make these sorts of measurements to comply with U.S. GAAP.”
Michael A. Crain, CPA/ABV, ASA, CFA, CFE, Former Chairman, AICPA Business Valuation Committee
“The interactions between and multitude of financial reporting statements, pronouncements, and issues for businesses combinations create a maze of complexity in applying those standards. The “Guide to Financial Reporting” provides a road map to guide the user through those interactions with practical examples that tie the accounting guidance to the practical aspects of valuation methodologies. I would recommend the guide to anyone wanting a better understanding of these pronouncements and their application.”
Darren S. Cordier, CFA, MBA, President, FV Specialists, Inc.
“Through this Guide, valuation experts, auditors and preparers of financial statements alike will acquire the necessary skills to meet the rigors of FASB’s new pronouncements on fair value and business combinations, specifically SFAS 141R, SFAS 160, and SFAS 157. The guide examines these “principle based” pronouncements, their particular nuances, and their relationship to one another in a clear and concise manner. Finally, the Guide applies these principles learned to a business combination case study that encompasses the specialized valuation techniques for valuing tangible assets, intangible assets and liabilities.”
Donald P. Wisehart, ASA, CPA/ABV/CFF, CVA, MST, President, Wisehart, Inc.
