The predominant amount of S&P 500 value comes from intangible assets and goodwill (“Intangibles”) of the underlying companies. It is no surprise that patents and brands are more valuable than desks. Understanding the components of intangible value is of great relevance to tax authorities and financial stakeholders.
“Our business is worth $10 million,” they said. So the buyer only needed $6 million cash to buy it. There are many ways to talk about what a business is worth. In the above example, $10 million can be Business Enterprise Value, while $6 million is the value of equity. The buyer assumed a $4
Can you find a business valuation estimate on a financial statement? The balance sheet contains the book value of equity, which is the first approximation of what the company is worth. The number would actually be pretty good if it weren’t for unaccounted-for intangible assets and goodwill. For recently acquired companies, the book value of
This article covers several key factors to consider when building a financial forecast or projected financial information (PFI). This guidance is designed for financial forecasts used in purchase price allocations, i.e., valuation of intangible assets as part of purchase accounting under US GAAP ASC 805 and IFRS 3. Here are a few requirements: PFI
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.
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.
We are located in the San Francisco Bay Area, while our clients cover much broader geography, from Southern California to the East Coast and Europe. Please contact us with questions and inquiries. Also, feel free to stop by on your way to the beautiful Sonoma or Napa Valley.
