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ASC 805 Valuation Update: Application Software

Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC) have consistently emphasized the importance of accurate business combination accounting.  The introduction of the substantially updated guidance coincided with the recession, resulting in 2010 to be the first full year for the healthy, post-FAS 141R M&A activity.  We studied the accounting purchase price allocation results with the focus on goodwill and identifiable intangible asset for Application Software companies.  Please download our summary by clicking on the image below.

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More Updates

Shadow Preferred Stock Devalues Convertible Note

Convertible notes are starting to resemble CDOs, collateralized debt obligations that led to the 2008 financial crisis, partly because few understood how they worked. From the economic perspective, convertible notes are complex; that includes Simple  Agreements for Future Equity (SAFEs). In fact, they are referred to as “complex financial instruments” by auditors and financial regulators.  A typical convertible note is

What M&A Purchase Consideration Is Actually Worth?

Most M&A pricing efforts are focused on valuing an acquired business. Essentially no consideration is given to the value of assets an acquirer is giving up in a transaction. We will attempt to clarify some of these issues.

Covid-19 | Valuation Update | Three Months In

Just over three months ago, financial markets started responding to the news of a new pandemic. Within the following four weeks S&P 500 fluctuated between 3,373 and 2,237, effectively losing a third of its value. One of the most significant financial valuation melt-downs was on its way.

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