In Related-Party Cost Sharing Arrangements (Part II of II) This two-part paper demonstrates how the discount rate associated with the investment in intangibles developed under a cost sharing arrangement can be calculated using an analytical framework that explicitly considers variability of outcomes in profitability of the intangibles to be developed. Such framework is the probability-weighted scenario analysis. The method of calculating discount rates using the scenario analysis can be applied to compute the PCT payment under both the “income method” and the “residual profit split method” described in the U.S. transfer pricing regulations. The same method also allows to calculate…
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In Related-Party Cost Sharing Arrangements (Part I of II) This two-part paper demonstrates how the discount rate associated with the investment in intangibles developed under a cost sharing arrangement can be calculated using an analytical framework that explicitly considers variability of outcomes in profitability of the intangibles to be developed. Such framework is the probability-weighted scenario analysis. The method of calculating discount rates using the scenario analysis can be applied to compute the PCT payment under both the “income method” and the “residual profit split method” described in the U.S. transfer pricing regulations. The same method also allows to calculate…
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Mercer Capital started writing weekly about fair value reporting in 2013. Looking back over more than three years and 150 posts, it seemed an opportune time for them to review their posts and compile what might, for lack of a better term, be called a “Greatest Hits” collection of their favorites. Travis Harms, lead of Mercer Capital’s Financial Reporting Valuation Group, introduces you to their new book entitled, Market Participant Perspectives: Selections from Mercer Capital’s Financial Reporting Blog. To learn more about this collection, read the full article in Mercer Capital’s Financial Reporting Blog, click: Market Participant Perspectives. This article…
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Goodwill—should it be amortized or not? That is one of the questions the FASB has wrestled with over the last few years. Lucas Parris, senior member of Mercer Capital’s Financial Reporting Valuation Group, takes us through the changes to this system that are in the works, as the FASB Board made a few tentative decisions regarding the accounting for goodwill impairment for public and private entities. To read the full article in Mercer Capital’s Financial Reporting Blog, click: FASB Muses on Goodwill Impairments. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe…
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Mergers and acquisitions (M&A) have continued growing since 2008’s financial crisis. Through the first three months of 2016, the value of worldwide M&A totaled nearly $750 billion. Cross-border M&A activity totaled $308 billion—accounting for a quarterly record-high 41% share of global M&A value. As in previous years, M&A in industries with hefty intangible assets—such as pharmaceuticals and technology, media and telecom—dominated deal making.[1]
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“It’s a Huge Case for the Patent-Law Community.” On One Side: Google, Facebook, Intuit. On the Other? IBM. “Because the patents are often unclear, there’s no way to know whether an infringement claim by a competitor or a troll is legitimate until you’ve spent $8 million in litigation fees,” said Mr. Schruers Ashby Jones in the Wall Street Journal reports this morning that a federal appeals court in Washington, D.C., will hear arguments Friday over a fundamental question that has vexed the technology industry for nearly two decades: When is a piece of software patentable?