We wouldn’t go that far, but the Financial Accounting Standards Board (FASB) endorsed three accounting proposals that simplify US GAAP for private companies: Recognition of intangible assets in purchase accounting (read here …) Goodwill impariment testing (read here …) Pay-fixed interest rate swaps (read here …) 1. Intangible Asset Recognition: Private companies are not to
A recent headline from “All Things D” declared: “Pinterest Completes $200 Million Funding at $2.5 Billion valuation.” $2.5 Billion is an impressive number we’d like to dwell on for a while. According to TechCrunch, this new round of funding brings the total amount invested in Pinterest to $338 million. Without a doubt, the return is
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
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