The key reason for engaging a third party to provide valuation services in a regulatory environment is independence. Without an arm’s length transaction, the true value of an asset, business entity, or financial instrument are extremely hard to determine. Because valuer’s subjective judgment has such a dramatic impact on the value conclusion, the IRS and
Accounting rules around the world require companies to record the values of certain intangible assets obtained from an acquired entity. There are two types of intangible assets, those that need to be separately valued and recorded on financial statements and those that fall under a broad umbrella of goodwill. There is no shortage of guidance
With so much focus on the valuation of the last financing round, value dilution of more junior equity classes is often overloooked. Indeed, $2 paid in the latest Series B round does not entitled common or Series A shareholders to the same value per share. Common sense along with the financial theory tells us that
Financial valuation is a process of estimating what something is worth at a particular point in time. This point in time is referred to as the valuation date. Values of assets and liabilities change continuously. Thus valuation date has to be selected carefully to align with relevant strategic or regulatory goals. The valuation date can
Accounting Standard Codification Topic 805 (“ASC 805”), Business Combinations, was designed to provide additional transparency in purchase accounting. The biopharmaceutical industry is a clear beneficiary. With significant contingent payouts, the purchase considerations paid for pre-revenue drug development companies are extremely difficult to assess. Under ASC 805, financial statements provide much better information about the values
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
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