Fair Value Measurement : Practical Guidance and Implementation.
Mark L. Zyla
Bok Engelsk 2012 · Electronic books.
| Omfang | 1 online resource (593 pages)
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| Utgave | 2nd ed.
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| Opplysninger | Intro -- Fair Value Measurement -- Contents -- Preface -- Acknowledgments -- Chapter 1: The History and Evolution of Fair Value Accounting -- Why the Trend toward Fair Value Accounting? -- The Changing Economy -- Globalization -- Relevance and Transparency -- History and Evolution of Fair Value -- Development of Fair Value Concepts -- Fair Value of Financial Instruments -- Fair Value of Financial Instruments -- Fair Value Measurement for Nonfinancial Assets and Liabilities -- Fair Value Measurement -- Fair Value Accounting and the Economic Crisis -- Mark‐to‐Market Accounting -- Application of Fair Value Accounting in an Illiquid Market -- SEC Study on Mark‐to‐Market Accounting -- The FASB's Credit Crisis Projects -- Financial Crisis Advisory Group (FCAG) -- The FASB and IASB Convergence Project -- The SEC and IFRSs -- The Future of Fair Value Measurement -- Conclusion -- Notes -- Chapter 2: Fair Value Measurement Standards and Concepts -- FASB ASC 820, Fair Value Measurement -- Definition of Fair Value Measurement -- ASC 820 Scope and Scope Exceptions -- Initial Measurement -- Fair Value Framework -- Application to Liabilities and Instruments Classified in a Reporting Entity's Shareholders' Equity -- Valuation Techniques -- Measuring Fair Value When Market Volume or Activity Has Significantly Decreased -- Using Quoted Prices Provided by Third Parties -- Disclosures -- Required Disclosures -- Private Companies -- Fair Value Option -- Conclusion -- Notes -- Chapter 3: Business Combinations -- Mergers and Acquisitions -- Motives for Mergers and Acquisitions -- M& -- A Pitfalls -- Accounting Standards for Business Combinations-A Brief History -- ASC 805, Business Combinations -- The Acquisition Method -- Other Business Combination Highlights -- Definition of a Business -- The Measurement Period -- Business Combinations Achieved in Stages.. - Contingent Consideration: Earn-Outs in Business Combinations -- Contingent Consideration Facilitates M& -- A Transactions -- Accounting for Contingent Consideration -- Measuring the Fair Value of Contingent Consideration -- Contingent Consideration from an Asset Perspective -- Conclusion -- Notes -- Appendix 12A: Measuring the Fair Value of a Loan Guarantee -- The Jordan Lee Fund Guarantee of Townsend Farm Development, LLC -- Notes -- Chapter 13: Auditing Fair Value Measurement -- Auditing Standards -- Audit Standards for Fair Value Measurements and Disclosures -- The Audit Process -- Assertions about Economic Events and Conditions -- Degree of Correspondence between Assertions and Established Criteria -- Objectively Obtaining and Evaluating Evidence -- Systematic Process -- Communicating the Results to Interested Users -- Auditing Estimates in Fair Value Measurements -- AU 328, Auditing Fair Value Measurements and Disclosures -- Testing Management's Fair Value Measurements -- Testing Management's Significant Assumptions, the Valuation Model, and the Underlying Data -- Testing the Reliability of Management's Assumptions -- Testing the Data -- PCAOB Staff Audit Practice Alert No. 2 -- Auditing Fair Value Measurements -- Classification within the Fair Value Hierarchy -- Using the Work of a Valuation Specialist -- Use of a Pricing Service -- PCAOB Staff Audit Practice Alert No. 9 -- SEC Audit Guidance -- AICPA Non-Authoritative Guidance -- The Appraisal Foundation -- Conclusion -- Notes -- Appendix 13A: Auditing a Business Combination or a Step 2 Impairment Test -- General -- Income Approach -- WACC -- Customer Relationships -- Cost Approach -- Technology -- Workforce -- Market Approach -- Trade Name/Trademarks -- Licenses-Relief from Royalty Method -- Appendix 13B: Auditing a Step 1 Goodwill Impairment Test -- General -- Income Approach -- WACC.. - Fair Value of the Contingent Consideration Transferred -- Acquisition‐Related Costs -- Acquired Contingent Assets and Liabilities -- In‐Process Research and Development (IPR& -- D) -- Subsequent Accounting for Goodwill and Other Intangible Assets -- Conclusion -- Notes -- Chapter 4: The Nature of Goodwill and Intangible Assets -- History of Intangible Assets -- Intellectual Property -- Economic Basis of Intangible Assets -- Identification of Intangible Assets -- Examples of Specific Intangible Assets -- Useful Life of an Intangible Asset -- Intangible Assets and Economic Risk -- Goodwill -- Nature of Goodwill -- Economic Balance Sheet -- Conclusion -- Notes -- Chapter 5: Impairment -- Evolution of Impairment Testing -- Applicable FASB Guidance for Impairment Testing -- Order of Testing -- Accounting for the Impairment of Long-Lived Assets -- When to Test Long‐Lived Assets for Impairment -- Impairment Testing at the Asset Group Level -- Disclosure Example: Carrols Corporation-Impairment of Long‐Lived Assets -- Goodwill Impairment Testing -- When to Test Goodwill and Intangible Assets for Impairment -- Qualitative Impairment Testing -- Step One-Quantitative Impairment Testing -- Testing Other Indefinite-Lived Intangible Assets for Impairment -- Conclusion -- Notes -- Appendix 5A: Example of a Qualitative Impairment Analysis-PlanTrust, Inc. -- Financial Accounting Standards Board ASC 350, Intangibles-Goodwill and Other -- PlanTrust, Inc. -- The Company and Reporting Unit -- Prior Impairment Analysis -- Analysis of Events -- Industry Overview -- Guideline Company Trends -- General Economic Outlook3 -- Financial Analysis of the Reporting Unit -- Comparison of Weighted Average Cost of Capital -- Comparison of the Carrying Value -- Conclusion of Qualitative Assessment -- Notes -- Chapter 6: The Cost Approach.. - Market Approach.. - The Cost Approach under FASB ASC 820, Fair Value Measurement -- Economic Foundation for the Cost Approach -- Cost versus Price versus Fair Value -- The Role of Expected Economic Benefits in the Cost Approach -- Reproduction Cost versus Replacement Cost -- Components of Cost -- Obsolescence -- The Relationships among Cost, Obsolescence, and Value -- Physical Deterioration -- Functional (Technological) Obsolescence -- Economic (External) Obsolescence -- Applying the Cost Approach -- Historical Cost Trending -- The Unit Cost Method -- The Unit of Production Method -- Taxes under the Cost Approach -- Limitations of the Cost Approach -- Conclusion -- Notes -- Chapter 7: The Market Approach -- Measuring the Fair Value of an Entity Using a Market Approach -- Guideline Public Company Method -- Invested Capital versus Equity Multiples -- Control Premiums -- Guideline Transaction Method (Merger and Acquisition Method) -- The Application of the Market Approach in Measuring the Fair Value of Intangible Assets -- Guideline Transactions Method -- Conclusion -- Notes -- Appendix 7A: Using the Guideline Transaction Method to Measure the Fair Value of a Privately Held (or Thinly Traded) Debt Security -- The Preston Portfolio Group -- Chapter 8: The Income Approach -- Discounted Cash Flow Method -- Comparing the WACC to the Internal Rate of Return -- Multiperiod Excess Earnings Method -- Applying the MPEM -- Returns on and of Contributory Assets -- Prospective Financial Information (PFI) -- FASB Concepts Statement 7 -- Rates of Return under the Income Approach -- Examples of Required Returns on Contributory Assets -- The Income Increment/Cost Decrement Method -- Profit Split Method -- Build-Out Method, or "Greenfield Method" (With and Without) -- Weighted Average Cost of Capital Calculation -- Capital Structure -- Equity Rate of Return (ke) -- Debt Discount Rate (kd).. - Venture Capital Rates of Return -- Conclusion -- Notes -- Chapter 9: Advanced Valuation Methods for Measuring the Fair Value of Intangible Assets -- Limitations of Traditional Valuation Methods -- Real Options -- Option Basics -- Using Option-Pricing Methodologies to Value Intangible Assets -- Using Financial Option Models to Measure the Fair Value of Intangible Assets -- Example of Using Option Pricing Methods to Estimate the Fair Value of an Intangible Asset -- Black-Scholes Option Pricing Model -- Example of a Real Option Measured with the Black‐Scholes Options Pricing Model -- Binomial or Lattice Models -- Example of a Real Option Measured with a Binomial Model -- Monte Carlo Simulation -- Monte Carlo Simulation Example -- Decision Tree Analysis -- Example of a Decision Tree Analysis -- Conclusion -- Notes -- Chapter 10: The Remaining Useful Life of Intangible Assets -- FASB Guidance on Determining the Remaining Useful Life -- Indefinite‐Lived Assets -- The Useful Life of an Intangible Asset with Renewals -- Considerations in Measuring Useful Lives of Intangible Assets -- Applying the Determinants When Measuring Useful Life -- Guideline Useful Lives -- Conclusion -- Notes -- Chapter 11: Fair Value Measurement for Alternative Investments -- Investments in Certain Entities That Calculated Net Asset Value per Share -- AICPA Technical Practice Aid -- Determining Whether NAV Is Calculated Consistent with FASB ASC 946 -- Adjusting the NAV -- AICPA Guidance for Determining the Fair Value of Investment -- Redeemable versus Nonredeemable Investments -- Market Participant Inputs -- Initial Due Diligence Features of Alternative Investments -- Ongoing Monitoring Features -- U.S. Private Equity Valuation Guidelines -- Fair Value Measurement for Alternative Investment Funds -- Conclusion -- Notes -- Chapter 12: Contingent Consideration.. - FAIR VALUE MEASUREMENT Practical Guidance and Implementation "Writing Fair Value Measurement was a monumental task fraught with controversy not only in the U.S., but also abroad. Having coauthored a book with Mark as well as written one myself, I was even more impressed that Mark was able to navigate these fair value minefields and produce a work that will be a tremendous help to accountants and non-accountants alike. If you are looking for a 'one-stop' book on fair value measurement, this is it!" -Neil J. Beaton, CPA/ABV, CFA, ASA, Managing Director, Valuation Services, Alvarez & Marsal "In recent years, the FASB and the IASB have added many requirements for various assets and liabilities to be measured at fair value. In this book, Zyla clearly describes how to implement fair value measurement and how investors and creditors should interpret it. The crisp writing and illuminating analysis will help readers to grasp the essence of fair value accounting and to apply it wisely." -J. Edward Ketz, Associate Professor of Accounting, Pennsylvania State University "The focus of the book is on fair value measurement based on level 3 inputs. This is a critical area of valuations for financial reporting due to a false comfort given by routine application of evaluating models and assumptions without real possibilities of calibration. Mark Zyla offers an extraordinary help in understanding the reliability of the inputs and the outputs of the different methodologies and the inherent biases in each of them. The book is a precious support for better valuation both in U.S. GAAP and in IFRS fair value reporting." -Mauro Bini, Full Professor of Corporate Finance, Bocconi University; Chairman, Management Board OIV (Organismo Italiano di Valutazione) Essential guidance on the fair value measurement process Now in a second edition, Fair Value Measurement: Practical. - Guidance and Implementation helps you succeed in understanding the fair value accounting rules that entities must follow. The result is a resource that you can rely on to understand the importance of valuation and the concepts that define it. In basic, nontechnical language, author Mark Zyla presents practical direction for best practices of financial valuation as well as for understanding the many FASB pronouncements involving fair value. An essential guide for auditors and valuation specialists, Fair Value Measurement: Practical Guidance and Implementation, Second Edition brings you up to speed on what fair value really means.
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| ISBN | 9781118284568
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