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ASC 805 Valuation Update: Social Gaming

The Social Gaming has been one of the most active sectors for M&A transactions in the global technology industry.

With the promise of significant growth and almost immediate profitability,social game developers provide for attractive acquisition targets in buy vs. build strategy.  Please download our summary by clicking on the image below.

While M&A activity is robust, little public information is available about the values of individual intangibles acquired.  Most deals are relatively small or completed by private players, thus limiting the amount of accessible information.  This update presents both public and our proprietary ASC 805 valuation data.

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More Updates

Market Multiples: You Probably (Very Likely) Need to Revisit

The market approach is very popular in valuation. One simply multiples a financial metric, e.g., revenue or EBITDA, by a market multiple. For example, with 5.0x EBITDA multiple, a company with $10 million in EBITDA is worth $50 million. Comparable publicly traded companies or transactions (the “comparables”) provide the multiples.

Six Purchase Price Allocation Issues to Know

AI may not catch up with valuations for purchase accounting very soon. We can credit changing best practices and a steady flow of non-authoritative guidance. They always bring fresh considerations and new calculations to explore. Yet, there are real practical implications for clients to consider.

Secondary Transactions and Valuations

Stock pickers believe they can value assets better than the market. The research shows otherwise. The financial accounting rules don’t play around and require observable transaction values to be the primary indicators. This topic is relevant for most privately held security valuations, including broad fair value issues, IRC 409A valuations, portfolio valuations, and tax.

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