Study: More Deals Occur in Countries That Follow Similar Financial-Reporting Standards At CFO.com Kathleen Hoffelder reports that dissimilar national accounting standards and the lack of adherence to international financial reporting rules seem to be a major deterrent to companies eyeing targets beyond their borders, according to a recent academic study. Moreover, cross-border acquisitions by companies of target firms in countries with similar accounting strictures tend to relieve CFOs and other senior executives of financial and administrative burdens, says Shawn Huang, assistant professor at the University of Arkansas and one of the survey’s authors, along with Jere Francis, a professor at…
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Few Companies with Under 100 Employees Have Fraud Controls in Place Small businesses are significantly more likely than their larger counterparts to neglect instituting basic antifraud controls that could save them from costly losses, a recent worldwide survey shows. The Journal of Accountancy reports in the August issue:
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The U.S. Must Cut $800 or $900 billion From Our Annual Government Spending to Maintain Mid-term Economic Solvency. And That’s Just the Beginning. Flooding the system with trillions of dollars and deficits has bought the U.S. economic stagnation, writes Rob Slee in an August 20, 2012 post at MidasNation. “What a lost opportunity. One thing we learned in MidasNation over the past few years is that when owners ignore the exponentially changing market and put their heads even deeper in the sand, only bad things result. Further, incremental actions will not change the equation for the better either.…
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Acquiring Companies Need to Conduct a Brand Valuation Post-Acquisition to Comply with IFRS. Here’s Why it Makes Sense to Do it Before the Acquisition. As all companies complying with IFRS must carry out a brand valuation post acquisition for compliance, there’s a strong argument for carrying out the necessary due diligence and valuation beforehand, explains the marketing director of Intangible Business, in a piece first published in Finance Week. Valuing brands pre-acquisition helps management determine how much to pay, it can help finance the deal, prepare the team for integration and identify opportunities for the brand. Seeing as…
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Divorce Proceedings Can Stall Operations, Distract Key Employees, and Require Expensive Outside Counsel. Here’s How Good Planning Can Mitigate the Costs. Solid legal counsel, pre- and post-nuptial agreements, shareholder agreements, confidentiality, and structured settlements can all ease the strain on a small business during a divorce proceeding, explains Jennifer A. Brand at the Fox Small Business Center. Find out the details.
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Infosys, the Indian IT Services Giant, Has Assigned a Value to Its Entire Workforce Since 2008. Here’s Why European and American Companies Don’t Yet Formally Value Employees—and Why They Should! Recognizing the value of employees in company accounts makes a compelling business case and reflects the realities of 21st century business, argues Leon Kaye in the Guardian.
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Healthcare Practices Still Command Significant Goodwill Value. Here’s How Owners Can Successfully Plan an Exit. According to The Health Care Group’s Goodwill Registry, a database of buy-in and sale transactions, medical and dental practices are still commanding significant prices for intangible value/goodwill. Here’s the detail on the numbers and guidance for optimal ways owners can find a successor, partner firm to merge with, or effect an outright sale.
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New Rule Intended to Help Inform Mortgage Applicants of How Value Is Determined The Consumer Financial Protection Bureau (CFPB) released Wednesday a new proposed rule that would require mortgage lenders to provide home loan applicants with appraisal reports to determine how the value of a property was determined, reports Tory Barringer at DS News, an outlet that focuses on the mortgage default servicing industry. CFPB proposed the rule in response to a provision of the Dodd-Frank Act that requires creditors to provide mortgage applicants with a copy of written appraisals and home value estimates. The newly-proposed rule would require that…
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It’s Critical to Have an Exit Plan: But Unforeseen Disability or Untimely Death Contingencies Need to Be in Place Too. Here’s What to Consider Have you ever dreamed of selling your business and retiring to pursue a lifelong passion or hobby? Hopefully, that will happen. But, let’s face it. Life is unpredictable.
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Key Strategies Include Building Competitive Intelligence, Reading Trade Media, Innovation and Response to Trends, and More. Bruce Marcus at CPA Trendlines offers a guide to trend-spotting for accountants:
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Survey Shows Half of Respondents are Considering Cloud Solutions, and Three Quarters Believe Cloud Strategies Will Be Important for Their Firm’s Success Within 12-18 Months Christine Camara at Accounting Web reports that a majority of top finance executives in US companies foresee Cloud computing lowering costs and helping their businesses succeed in the near future, according to a new survey – The Business Value of Cloud Reporting: A Survey of Senior Finance Executives. More:
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Recommendation Framework Paper Available; Comment Period Ends October 31st. Late last month the FASB released its initial staff recommendations on whether and when it will be appropriate to adjust financial reporting requirements for private companies, the Journal of Accountancy reports. The recommendations are contained in a paper, Private Company Decision-Making Framework: A Framework for Evaluating Financial Accounting and Reporting Guidance for Private Companies. FASB on Tuesday invited stakeholders to comment on the recommendations. In May, the Financial Accounting Foundation (FAF), FASB’s parent organization, created the Private Company Council (PCC). The new council will identify, deliberate, and vote on proposed changes, which will…
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Beyond Deal Price, Consider Deal Structure, Earnouts, and Appropriate Standard of Value When one company is acquiring another, the deal price is often the primary factor considered. Too many times, however, critical issues are overlooked, explains Sean R. Saari, CPA/ABV, CVA, MBA. Smart Business spoke with Saari about five questions any business valuation any acquirer needs to consider:
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In Berquist v. Commissioner, Judge Swift Finds a Company’s Pending Liquidation is Relevant and Foreseeable. Brand valuation is becoming an ever more critical business as intangible assets are increasingly being recognized as highly valued property, writes Sophie Roberts in Intellectual Property. Consider: A vast majority of work your business is already doing today almost certainly affects brand value. Whether it’s business transactions (M&A, partnership, licensing negotiation, accounting compliance) or litigation (damage/loss calculations, royalty rate issues, IP infringement) or internal marketing (brand management, marketing ROI calculation and investment), brand value is key. Here’s informed analysis on today’s existing law, brand value…
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In Berquist v. Commissioner, Judge Swift Finds a Company’s Pending Liquidation is Relevant and Foreseeable. The Tax Court valued closely-held stock in an anesthesiology practice donated to a hospital for charitable contribution purposes at its liquidation value since the anesthesiology practice would no longer exist after the physician-stockholders were consolidated into a newly-formed umbrella physician management company. The donors valued the practice at $401.79 per share under the going concern premise of value. The respondent determined a fair market value of $37.00 per share under the liquidation premise of value. The Judge cited one key factor that determined his ruling. …
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In Nebraska, Judge Considers: Should Damages be Limited to the Length of a Non-Compete Clause? The Supreme Court of North Dakota prefers the testimony of an accredited appraiser, a Tennessee court asks an expert witness to stick to the topic rather than allowing him to recommend an alternative legal remedy, and a Nebraska court considers whether damages should be limited to those incurred during the period of a non-compete agreement. Find out the details.
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Here’s How To Understand the Set-Up and Then Make Pre-Valuation Adjustments Valuation gets tricky when it involves complex ownership structures. Rand Curtiss explains how to approach the appraisal of companies that own interests in other companies, companies that charge fees to affiliated companies, and groups of companies that have several owners each holding different ownership percentages.
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Plan for Death, Disability, and a Partner Wanting Out. Here’s Why. John P. Napolitano, CEO of U.S. Wealth Management in Braintree, Mass., and 2012 president of the Financial Planning Association of Massachusetts, explains why it’s critical to think about the future, even if you’re overwhelmed with work today:
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Regular Marketing is Important, and Existing Clients Are One of the Best Sources of Referrals. Here’s How to Get the Best Return on Marketing Investment. Ed Mendlowitz regularly fields questions from readers at CPA Trendlines. Recently he opined on the importance of regular marketing. One tip: leverage your existing clients for referrals. Specifically, he adds:
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Relative Levels of Equity and Debt Affect Risk and Cash Flow. This Has Substantial Impact on Amount Investors Will Pay. Matt Stelzman notes in the Chattanooga News TimesFreePress that the question that often arises in connection with a business valuation is whether the valuator should use the company’s actual capital structure or its anticipated future capital structure. A valuator might also use a prospective buyer’s capital structure or the company’s “optimal” capital structure. Which method is best depends on several factors, including the type of interest being valued and the valuation’s purpose. More: