Focus on Financial Accounting and Reporting Issues
Topical Editor for this issue: Kenneth J. Pantoga
FASB Proposed Statement No. 141 Replacement:Improved Financial Reporting of Business Combinations?
Kenneth J. Pantoga and Lisa H. Tran
The Financial Accounting Standards Board removed the pooling-of-interests method of business combination accounting from U.S. GAAP in 2001 with the issuance of SFAS No. 141. Now, the FASB has released preliminary statements outlining revisions to SFAS No. 141 that could change the accounting for business combinations just as dramatically.
Overview and Considerations of Statement of Financial Accounting Standards No. 123 (Revised)
Kenneth J. Pantoga and Douglas H. Milnes
Recently, the Financial Accounting Standards Board revised SFAS No. 123, Share Based Payment. The revision changes rules regarding the valuation and expensing of stock options. SFAS No. 123R creates several potential issues for those private companies with employee stock option plans that prepare their financial statements in accordance with U.S. GAAP
Fair Value Measurement and the Use of Present Value Techniques
Trey Stevens
Fair value measurements are being increasingly required for financial accounting purposes. Present value techniques are often an important component in estimating fair value. This article discusses FASB guidance on these techniques and their use in the valuation of businesses, business interests, and intangible assets.
Valuation Needs Stemming from Emerging Issues Task Force 04-1: Accounting for Preexisting Relationships between the Parties to a Business Combination
Adrian R. Loud
EITF 04-1 provides the accounting guidance for parties to a merger or acquisition when those parties already have a preexisting business/contractual/legal relationship. In the accounting for such a business combination, a valuation may be required to account for the settlement of the preexisting relationship.
Valuation and Accounting for Purchased Goodwill
Robert F. Reilly and Robert P. Schweihs
This discussion summarizes SFAS No. 141 and SFAS No. 142. And, this discussion presents the financial reporting issues related to purchased goodwill and how these issues affect the valuation of the purchased goodwill intangible. This discussion also presents examples that illustrate the value of goodwill consistent with the application of SFAS No. 141 and SFAS No. 142.
SFAS No. 142 Intangible Asset Impairment Case Study
Jacquelyn DeRosa
First, this illustrative case study summarizes the SFAS No. 142 financial accounting and intangible asset valuation provisions. Next, this case study presents a hypothetical set of facts and circumstances. Finally, this case study applies the provisions of SFAS No. 142 to the hypothetical fact set, in order to test for goodwill and other intangible asset impairment.
European Implementation of International Financial Reporting Standards
Victoria A. Platt
Effective for financial statements prepared on or after January 1, 2005, European companies must comply with the International Financial Reporting Standards (IFRS). Valuation analysts and investors who use European company financial statements should become familiar with the accounting and valuation implications of these financial reporting standards.
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