To Attract or Retain Key Employees To both attract and retain key employees, many private companies have added stock-based compensation grants to their portfolio of employee compensation arrangements. An important component of any private company stock-based compensation arrangement is the value of the private company stock. Therefore, private company clients expect valuation analysts to be at least generally familiar with the management considerations related to such stock-based compensation programs. This discussion summarizes some of the basic—but important—income tax considerations about the compensatory transfer of employer corporation stock. This discussion summarizes both the employer’s and the employee’s federal income tax considerations…
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The challenges associated with FASB’s new revenue recognition standard have been substantial for many companies, but at least they’re gaining valuable data and process improvements as a result of the implementation. To read the full article in the Journal of Accountancy, click: Finding Value in Revenue Recognition Implementation.
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What is driving the global surge in M&A deals? In many cases, companies are looking for revenue growth. But how is the pursuit of revenue synergies working out? With less than a quarter of acquirers reporting that they are achieving more than 80% of their target, there is clearly room for improvement. This may not come as a surprise—it is widely understood that revenue synergies are more difficult to achieve when compared to cost synergies. At the same time, some companies are meeting their revenue targets. What are they doing that others are not? In this survey report, we find…
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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 to private company accounting standards that could lead to lower valuations. Read more about the results of this report in the Mercer Capital’s Financial Reporting article, Lower Valuations for Private Companies? This article is republished from Mercer Capital’s…
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A help or hinderance? On July 1, 2013, FASB issued exposure drafts calling for public commentary on three proposals that address private company stakeholder concerns. Two proposals involve accounting for identifiable intangible assets and goodwill acquired in business combinations. In this article, Mark Zyla analyzes the proposed changes, including potential concerns, and their far-reaching impact on the industry, as well as private and (in 2014) public companies.
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Private Companies and Nonpublic Not-for-Profits are Exempted from a Particular Fair Value Disclosure as a Result of Recent FASB Amendment The Financial Accounting Standards Board responded quickly to concerns voiced in December to issue an amendment clarifying that private companies and nonpublic not-for-profits are exempted from a particular fair value disclosure. Ken Tysiac at The Journal of Accountancy reports the news: