Fair Value Financial Reporting

Intangible Asset Valuation

As businesses continue to become more service based, intangible assets have increased in both recognition and value. CVI’s experts are well versed in the approaches and methods used to determine value for intangible assets specific to both Fair Value and Fair Market Value standards. Our appraisers regularly attend industry conferences and attend cutting edge educational events and discussions in order to stay informed of the ever changing regulations and advisement concerning intangible asset valuation.

Intangible assets valued by CVI include but are not exclusive to the following:

Brand names
Broadcast licenses
Buy-sell agreements
Chemical formulas
Computer software
Computerized databases
Cooperative agreements
Credit information files
Customer contracts
Customer & client lists
Customer relationships
Development rights
Distribution networks
Distribution rights
Drilling rights
Employment contracts
Environmental rights
FCC licenses
Favorable financing
Favorable leases
Food flavorings & recipes
Franchise agreements
Joint ventures
Leasehold interests
Loan portfolios
Management contracts
Mineral rights
Non compete covenants
Options, warrants, grants
Patent applications
Procedural manuals
Proprietary processes
Proprietary products
Proprietary technology
Retail shelf space
Royalty agreements
Shareholder agreements
Subscription lists
Supplier contracts
Trade secrets
Trained & assembled workforce
Trademark and trade names
Training manuals

Purchase Price Allocation

In general, the purpose of retaining a business valuation firm in relation to a purchase price allocation is to help identify and independently value appropriate intangible assets. The value of the identified assets is then combined with the firm’s other assets and considered against liabilities and price paid in order to recognize the net residual amount to be designated as goodwill.

CVI’s professionals have led several purchase price allocation engagements. Purchase price allocations often are complex transactions that if not managed properly, can become excessively expensive. Here at CVI, we take a collaborative approach by fostering communication between our appraisers, auditors, management and other professionals; thereby avoiding costly delays and/or misunderstandings.

Financial Accounting Standards Board (FASB) statements related to purchase price allocation and intangible asset valuation include the following:

  • ASC 805 Business Combinations
  • ASC 350 Goodwill and Other Intangible Assets

Stock Based Compensation

The valuation of stock options relies on several assumptions made by both top management and the appraiser. An independent business valuation firm, such as CVI, can help by determining the Fair Value of the underlying stock and by collaborating with management to develop reasonable and supportable assumptions. Our experts have performed several stock option valuation engagements through which our methodology, due diligence and experience often leads to a significantly expedited review process.

FASB statements related to stock based compensation include the following:

  • ASC 718 & 305 Accounting for Stock Based Compensation

IRS regulations related to stock based compensation include the following:

Other FASB statements related to the topics discussed above include:

  • ASC 820 Fair Value Measurements