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9780470497555

Business Combinations with SFAS 141 R, 157, and 160 A Guide to Financial Reporting

by ; ;
  • ISBN13:

    9780470497555

  • ISBN10:

    0470497556

  • Edition: 1st
  • Format: Paperback
  • Copyright: 2009-03-16
  • Publisher: Wiley

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Supplemental Materials

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Summary

The newly revised statement SFAS 141, in conjunction with SFAS 157 and SFAS 160, has significant implications to the accounting for a business combination. Here is your comprehensive resource to ensure proper interpretation of these statements, and more! Now available in PDF format, Business Combinations with SFAS 141R, 157, and 160: A Guide to Financial Reporting will show you how to: Document the appropriate financial reporting measurement clearly and concisely Apply the interpretations to specific facts and circumstances Determine fair value, including a SFAS 157 flowchart and checklist for implementing the standard And More!

Author Biography

Michael J. Mard is one of 11 valuation experts named to FASB’s Valuation Resource Group (the Group). The goal of the Group is to provide input to the FASB board and staff on diversity in practice impacting valuations performed for financial reporting purposes. The Group also includes accounting professionals from Big 4 and second-tier firms, preparers and users in industry organizations, and observers from accounting and other organizations, including the SEC, PCAOB, IASB, AICPA, and Federal Reserve Board of Governors.
After an honorable discharge from the Navy, Mr. Mard returned to college and earned his bachelor’s and master’s degrees from the University of South Florida in Tampa. Mr. Mard started his career with KPMG, was in public auditing for two years, then operational and internal auditing for eight years before becoming the supervising senior auditor for the Kemper Group of Insurance Companies. For the last 25 years, Mr. Mard has been a business appraiser with a broad range of experience from small companies to billion-dollar companies, both private and public.
He is president of The Financial Valuation Group of Florida, Inc., a firm specializing in business valuation, intangible assets, intellectual property, commercial damages and expert testimony. Mr. Mard is widely written and is lead or coauthor on seven books, including books on SFASs 141, 142 and 157. Mr. Mard has testified in court approximately 100 times. He is a CPA, an Accredited Senior Appraiser (ASA) with the American Society of Appraisers, and is Accredited in Business Valuation (ABV) by the American Society of Public Accountants. He can be reached at m.mard@fvgfl.com.

Steven D. Hyden, CPA/ABV, ASA is chief operating officer of The Financial Valuation Group of Florida, Inc. in Tampa, a financial advisory services firm specializing in valuation and litigation services. Mr. Hyden is also managing director of Hyden Capital, Inc., an affiliate providing merger and acquisition advisory services.
Mr. Hyden has coauthored and taught numerous valuation courses, was a guest expert for an AICPA Continuing Professional Education video course series, and worked with the FASB on its project, “Disclosure About Intangible Assets.” He served on the American Society of Appraisers Business Valuation Subcommittee - Valuation Issues in Financial Reporting, and is a member of the Appraisal Issues Task Force. Mr. Hyden is a coauthor of four books, including books on SFASs 141, 142 and 157.
Mr. Hyden has been a full-time business appraiser and expert witness for over 20 years, specializing in intangible assets, including intellectual property. He has developed analyses that have been reviewed and accepted by the Securities and Exchange Commission, major accounting firms, the IRS, and the courts.
Mr. Hyden has a bachelor’s degree in Marketing from Syracuse University and a MBA in accounting from Pace University in New York. He is a CPA, an Accredited Senior Appraiser (ASA) with the American Society of Appraisers and is Accredited in Business Valuation (ABV) by the American Society of Certified Public Accountants. He can be reached at s.hyden@fvgfl.com.

Edward W. Trott, CPA, was appointed to the Financial Accounting Standards Board (FASB) effective October 1, 1999, and was reappointed to a second five-year term in 2004. He left the Board on June 30, 2007. Formerly a partner of KPMG LLP, Mr. Trott began his career with the firm in 1968 in Greensboro, North Carolina, and also worked in the firm’s Tampa and national offices during his career. He headed the Accounting Group in the firm’s national office from 1992 to 1999.
Mr. Trott is a former member of the FASB’s Emerging Issues Task Force (EITF) and the Financial Reporting Committee of the Institute of Management Accountants. He has served as a member of the FASB’s Advisory Council (FASAC) and as a member of the American Institute of CPAs’ Accounting Standards Executive Committee (AcSEC).
Mr. Trott earned a bachelor’s degree from the University of North Carolina and an MBA from the University of Texas.

Table of Contents

About the Authors
Acknowledgments
Preface
Introduction
Philosophy of Fair Value
SFAS 157
Fair Value Philosophy
Convergence with IFRS
Norwalk Agreement
The IASB
Use of Valuation Specialists by Accountants and Auditors
Fair Value and SFAS 157
Scope
Fair Value Definition
Principal
Transaction Costs
Transportation Costs
Market Participants
Highest and Best Use and Valuation Premise
Applicability to Liabilities
Entry Price Versus Exit Price
Valuation Techniques: Market, Income, and Cost Approaches
Cost Approach
Income Approach
Examples of Present Value Techniques
Market Approach
Risk/Uncertainty Premiums
Inputs: Observable and Unobservable
Fair Value Hierarchy
Inputs Based on Bid and Ask Prices
Restrictions
Stock
Assets
Events Subsequent to a Quoted Price
Securities Owned as an Asset and Blockage Discounts
Disclosures
Subsequent Guidance about SFAS 157
EITFs
FSPs
Preparer's Guidance Flowchart of SFAS 157
SFAS 141R
Overview and Objective
Statement 141R and IFRS 3 as revised
Statement of 141R Reduces the Volume of US GAAP
Expanded Scope of Applying the Acquisition Method
Transactions Not Covered by 141R
The Acquisition Method
Identifying the Acquirer
Determining the Acquisition Date
Recognition and Measurement
Postcombination Expenses
Acquisition-Related Costs
Determining What Is Part of a Business Combination
Preexisting Relationships or Arrangement
Compensation Arrangements
Hidden Acquisition Costs
Classifying or Designating Assets and Liabilities
Examples of Acquired Assets and Assumed Liabilities Initially Recognized at Fair Value
Assets
Liabilities
Recording Assets and Liabilities at SFAS 157 Fair Value Differs from Guidance in SFAS 141
Exceptions to the Recognition or Measurement Principles
Assets/Liabilities Arising from Contingencies
Acquirer Obtains a Reacquired Right
Share-Based Payment Awards
Assets Held for Sale
Income Taxes, Tax Uncertainties, and Tax Valuation Allowance
Employee Benefits
Indemnification Assets
Additional Specific Guidance
Operating Leases
Capital Leases
Intangible Assets
Intangible Assets Not Recognized by Acquiree
Research and Development Assets
Assets an Acquirer Does Not Plan to Use or Sell
Recording the Consideration Transferred to Acquire the Acquiree, Including Contingent Consideration
Contingent Consideration
Calculation of Goodwill and Recording Noncontrolling Interest in the Acquiree
Goodwill Calculation in a 100% Acquisition
Goodwill Calculation in a Full Acquisition
Calculation of Goodwill in a Partial Acquisition and Recording Noncontrolling Interest
Gain from a Bargain Purchase
The Measurement Period for Recording a Business Combination
Disclosures about a Business Combination
Selected Disclosure Requirements
Effective Date and Transition
Other Guidance in Statement 141R
Subsequent Guidance about SFAS 141R
EITFs
Statement 160 and Noncontrolling Interest
Objective and Scope
Definition
Transactions that Change the Parent's Ownership Interest in a Subsidiary
Purchase of Noncontrolling Interest
Reduction in Parent Ownership Interest
Deconsolidation of a Subsidiary
Classification of Noncontrolling Interest
Changes to the Balance Sheet
Changes to the Income Statement
Additional Points about Noncontrolling Interest
Disclosures about Noncontrolling Interests
Selected Disclosure Requirements
Effective Date and Transition
Subsequent Guidance about SFAS 160
Comparing SFAS 141 with SFAS 141R
(New) SFAS 141R
(Old) SFAS 141
141R Flowchart
Case Study: Determining the Value of Goodwill and Other Intangible Assets in a Business Combination
Consideration and Calculation of the Total of Intangible Assets and Goodwill
Identifying Intangible Assets
Remaining Useful Life Analysis
Business Enterprise Analysis
Discounted Cash Flow Method
Discount Rate
Valuation of Tangible Assets
General Discussion
Marketable Securities
Accounts Receivable
Inventory
Prepaid Expenses
Land and Building
Machinery and Equipment
Organization Cost and Existing Goodwill
Summary of Values
Valuation of Intangible Assets
Rates of Return
Acquired Software
Amortization Benefit
Discount Rate for Amortization Benefit
Assembled Workforce
Trade Name
Noncompete Agreement
Technology
The Multiperiod Excess Earnings Method
Existing Technology
In-Process Research and Development
Customer Relationships
Valuation of Goodwill
Weighted Average Return on Assets
Case Study Accounting Entry
Abbreviated Sample Worksheet
Sample Balance Sheet
Case Study Exhibits
Other Discussion Issues
FASB's Valuation Resource Group
Issue No. 2008-19 - Impact of Valuing Contingent Liabilities under FAS 141(R) - Gross Versus Net Analysis
Issue No. 2008-18 - Fair Value of a Noncontrolling Interest and a Previously held Equity Interest
Issue No. 2008-17 - Identification and Allocation of Market Participant Synergies
Issue No. 2008-16 - Fair Value of Accounts Receivable, Account Payable, and Other Accrued Liabilities
Issue No. 2008-15 - Allocation of In-use Valuation to Individual Unit of Account
Issue No. 2008-14 - Fair Value Measurement of Liabilities Under FAS 157
Issue No. 2008-13 - Observable Versus Unobservable Inputs
Issue No. 2008-12 - Fair Value Disclosures
Issue No. 2008-11 - IASB Expert Advisory Panel White Paper
Issue No. 2008-10 - Contingent Liabilities
Issue No. 2008-9 - Employee Benefit Plans
Issue No. 2008-8 - Determining Whether a Discount Should be Applied for a Restriction on Sale
Issue No. 2008-7 - Observable versus Unobservable Fair Value Measurements in the Current Credit Environment
Issue No 2008-6 - Allocation of Portfolio-based Credit Adjustments for Hedge Effectiveness Testing
Issue No. 2008-5 - Fair Value of Inventory
Issue No. 2008-4 - Meaning of Legally Permissible in Assessing Highest and Best Use
Issue No. 2008-3 - Valuation of Intangible Assets Using "Current Replacement Cost"
Issue No. 2008-2 - Customer Relationships
Issue No. 2008-1 - Accounting for Assets that the Acquirer Does Not Intend to Use or Intends to Use in a Way Other than its Highest and Best Use
Issue No. 2007-16 - Use of Net Asset Value in Fund of Funds Investments
Issue No. 2007-15 - Accounting for Held to Maturity Debt Instruments
Issue No. 2007-14 - Pension Plan Disclosures
Issue No. 2007-13 - Accounting for Transaction Costs in Determining the Fair Value of an Investment
Issue No. 2007-12
Issue No. 2007-11
Issue No. 2007-10 - Fair Value of Asset Acquired Through the Highest Bid in Auction
Issue No. 2007-9 - Highest and Best Use Land Example
Issue No. 2007-8 - Fair Value of a Liability with Third-Party Guarantees
Issue No. 2007-7 - Assets without Markets
Issue No. 2007-6 - Defensive Value: Accounting Impact of Using Marketplace Participant Assumptions to Measure the Fair Value of an Asset That the Combined Entity Does Not Intend to Use or Sell
Issue No. 2007-5 - Determination of Principal Market
Issue No. 2007-4 - Elements of Consideration for Determination of "Active Market"
Issue No. 2007-3 - How to Factor Liquidity into Fair Value Measures
Issue No. 2007-2 - Unit of Account Decomposition of an Asset
Issue No. 2007-1 - Fair Value of Mortgage Loans
Other Implementation Aids
Fair Value Measurement Checklist
Preparer's Conclusions Worksheet
Acquiree Management Interview - Operations
Acquiree Management Interview - Financial Review
Data Request Related to Intangible Assets Acquired
Procedures for the Valuation of Intangible Assets
Table of Contents provided by Publisher. All Rights Reserved.

Supplemental Materials

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The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.

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