It seems like it was just last year when we mused if non-GAAP earnings measurements were becoming a permanent fixture of the market.  How quickly the times change.  Samantha Albert, senior financial analyst with Mercer Capital, explains. To read the full article in Mercer Capital's Financial Reporting Blog, click: Compensating for Something: Facebook’s GAAP Change. This article is republished from Mercer Ca ...

Common Analyst Misconceptions The first article in this series provided an introduction to valuation analysts (analyst) regarding the need to integrate and use the Asset-based Approach to value going-concern businesses and securities. This second installment addresses common analyst misconceptions regarding the use of the Asset-based Approach to value both asset holding companies and operating companies. ...

On December 27, 2016 Toshiba Corporation announced the possibility of a goodwill impairment charge related to its U.S. nuclear power plant construction business, which was acquired for $229 million in late 2015 by Toshiba’s Westinghouse Electric Company subsidiary.  Karolina Calhoun, senior financial analyst with Mercer Capital, describes that both the buyer and target have been plagued by financial difficu ...

The New Revenue Recognition Standard and Accounting for Licenses Wiley author, Joanne Flood, looks at how the new revenue standard affects reporting of licensing revenue. Copyright Wiley, 2016. To be published in February 2017 in the book: Wiley Revenue Recognition plus Website: Understanding and Implementing the New Standard (Wiley Regulatory Reporting). ...

Mergers and acquisition activity relays much information to the general public.  Following an M&A transaction, acquirer companies conduct purchase price allocations (PPAs) to measure the fair value of various tangible and intangible assets of the acquired business.  Karolina Calhoun, senior financial analyst with Mercer Capital, discusses that the Mercer Capital Lab Services Newsletter observes and anal ...

Analysis of Unaudited Financial Statements—Who and How? There has been much discussion within the ESOP community about the “settlement” and its reverberations. As readers are likely aware, the settlement in question refers to the 2014 settlement agreement between GreatBanc Trust Company and the United States Department of Labor (DOL). The terms of the settlement include, among other things, an agreement con ...

Jeff K. Davis, managing director of Mercer Capital’s Financial Institutions Group, attended Creditflux’s private credit conference in New York a couple of days before the Brexit vote.  He explains that there was not much concern mentioned among mostly U.S. credit investors about it as a market or economic catalyst; nor was there much concern expressed about an aging credit cycle. To read the full article in ...

The Appraisal Practice Board of the Appraisal Foundation released The Valuation of Customer-Related Assets.  As Karolina Calhoun, senior financial analyst with Mercer Capital, explains, the non-authoritative best practices guidance elaborates on valuation approaches and methodologies that can be used to measure fair value of customer-related intangible assets. To read the full article in Mercer Capital's Fi ...

The debate over the use of non-GAAP performance measures continues.  Even as the prevalence of these items grows in the financial reports of public companies, cautionary tales of the uses and abuses of such metrics garner headlines.  Lucas M. Parris, senior member of Mercer Capital’s Financial Reporting Valuation Group, explains. To read the full article in Mercer Capital's Financial Reporting Blog, click: ...

Following FASB’s issuance of its new leases standard, the first step in compliance for many companies is an evaluation of whether they possess all the data they need to report under the new rules.  Ken Tysiac, editorial director of JofA, explores four key considerations recommended for companies as they work to comply with the new leases standard. To read the full article in the Journal of Accountancy, clic ...

Reviewing a purchase price allocation report can be a daunting task if you don’t do it for a living.  Lucas M. Parris, senior member of Mercer Capital’s Financial Reporting Valuation Group, presents this guide which focuses on providing an overview of the structure and content of a properly prepared purchase price allocation report. To read the full article in Mercer Capital's Financial Reporting Blog, clic ...

The need to develop reliable, defensible fair value markets for hard-to-value assets is universal.  Sujan Rajbhandary, senior member of Mercer Capital’s Financial Reporting Valuation Group, sits down with Travis Harms to get his insight from a financial reporting perspective on a few issues around valuations of startups. To read more about the results of this report in the Mercer Capital's Financial Reporti ...

Stock-based compensation is used by companies of all shapes and sizes.  Travis W. Harms, leader of Mercer Capital’s Financial Reporting Valuation Group, explains from a valuation standpoint, the importance of measuring its fair value. To read more about the results of this report in the Mercer Capital's Financial Reporting Blog, click: Equity-Based Compensation: Are Non-GAAP Earnings Misleading?. This artic ...

A recent survey of investment professionals in the CFA Institute reports investor concerns about the use of different accounting standards and rules for SMEs under IFRS and private companies under GAAP.  Karolina Grabowicz, a financial analyst with Mercer Capital, reports how the use of different standards adds complexity and costs to financial reporting.  Issues also arise over the loss of information due ...

Creating Value for Business Owners and Board Members In this article, Edward Mendlowitz, CPA, ABA, CFF. shares his views regarding the importance of having a business valued. He identifies 50 ways that a valuation professional can provide something far more valuable than a number. While the valuation profession is under pressure to reduce costs or prepare a report, the business owner is better served in the ...

Evolving Accounting Standards for CPAs Wiley author, Joanne Flood, reviews three 2015 Accounting Standards Updates (ASUs). Those reviewed are ASU 2015-01, Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items,; ASU 2015-02, Amendments to the Consolidation Analysis; and ASU 2015-03, Simplifying the Prese ...

and the Process for the Valuation of a Closely Held Business (Part 1 of 2) Assessing shareholder value for either publicly held or privately held companies are two sides of the same coin. The U.S. capital markets have undergone significant changes in the past several years. This development in turn has had an impact on how these two types of companies are valued. Valuing public companies can be rather strai ...

Evolving Accounting Standards for CPAs Wiley author Joanne Flood reviews three significant Accounting Standards Updates (ASU).  First, she reviews ASU 2014–08, issued in April 2014. This ASU focuses on Reporting [for] Discontinued Operations.  This ASU changes the criteria for determining which disposals can be presented as discontinued operations.  In the remaining portion of the article, she summarizes ch ...

A Principle-Based Model Revenue Recognition Wiley author Joanne Flood looks at how the converged revenue standard affects companies reporting under U.S. GAAP. ...

  The Financial Accounting Standards Board (FASB) has issued two standards updates with the intention of simplifying the measurement of inventory and eliminating the requirement for extraordinary items. Inventory (Topic 330): Simplifying the Measurement of Inventory would eliminate existing requirements to consider the replacement cost of inventory and the net realizable value of inventory less an appr ...