FINANCIAL REPORTING VALUATIONS

Purchase Price Allocations

Under ASC Topic 805 – Business Combinations, our valuation professional’s work with
the management teams to identify and estimate the fair value (as defined in ASC Topic
820 – Fair Value Measurements and Disclosures) of tangible and intangible assets and
liabilities acquired in either a single reporting unit or multiple reporting units. In
transactions where there is contingent consideration, we have experts that estimate the
fair value of the contingent consideration at the initial measurement date as well as
subsequent measurement dates.

We provide purchase price allocation services in a pre-deal context when the client
either needs pro-forma financial statements or wants to estimate the impact of the
acquisition on future depreciation, amortization, and depletion expense.

For companies reporting under IFRS, we perform purchase price allocation services in a
similar manner under IFRS 3 – Business Combinations.

Asset Impairments

Under ASC Topic 360 – Property, Plant, and Equipment, our valuation professionals work
with management teams to test the recoverability of depreciable, amortizable, and/or
depletable asset groups, and if the recoverability test is failed, measure the impairment.
In addition, we can assist our clients in assessing and documenting whether a triggering
event has occurred requiring further testing.

For companies that report under IFRS, we perform asset impairment services under IAS
36 – Impairment of Assets.

Goodwill and Indefinite-Lived Intangible Impairments

Under ASC Topic 350 – Goodwill and Other, our valuation professional’s work with the
management teams to assess whether goodwill, or indefinite-lived intangible assets, are
impaired, and quantify any impairment as of the test date or in the instance a triggering
event has occurred. We perform goodwill impairment services at the reporting unit
level in accordance with ASC Topic 350.

For companies that report under IFRS, we perform asset impairment services under IAS
36 – Impairment of Assets at the cash generating unit level.

Fresh-Start Accounting

Under ASC Topic 852 – Reorganizations and ASC Topic 805 – Business Combinations, our
valuation professionals work with the management teams to allocate the value of a
business emerging from bankruptcy to the assets and liabilities of its reporting units.
Fresh start accounting is a complex process for most management teams going through
a restructuring for the first time. Our seasoned professionals have experience guiding
companies through the fresh start accounting process.

 

Stock-Based Compensation

Under ASC Topic 718 – Compensation – Stock Compensation, our valuation professionals
work with private and public companies to identify and review the terms of share-based
payments issued to employees (e.g. stock options, stock appreciation rights, restricted
stock units) and nonemployees (e.g. warrants), and estimate the fair value of these
share-based payments on the grant date and at subsequent measurement periods,
using appropriate valuation models and assumptions.

For companies that report under IFRS, we perform similar valuation services for share-
based payments under IFRS 2 – Share-Based Payment.

 

Portfolio Valuation

Under ASC Topic 820 – Fair Value Measurements and Disclosures, our valuation
professionals work with alternative asset investors and managers to estimate the fair
value of portfolio holdings on either a quarterly or annual basis.

The process of portfolio valuation for financial reporting purposes is complex given the
accounting standards that must be followed and the level of support required to get
sign-off from the investment company’s independent auditors.