Challenge

A client who designs, engineers, and manufactures value-added products and systems for automotive and light-vehicle manufacturers acquired an automotive components manufacturer. In addition to real and personal property, the client also acquired U.S. and foreign patents, trademarks, unpatented technology and various joint ventures. A valuation of the tangible and intangible assets was required for both financial and tax reporting purposes to satisfy ASC 805 and IRC Sec. 338(g) requirements. The operating locations of the acquired company were in the U.S., South America, Mexico and Europe.

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Solution

Our professionals designed an engagement strategy which included inspections of domestic and foreign facilities, while retaining management control from the United States. The focus of these inspections was to enhance the supportability of the company’s fixed asset reporting and determine the condition and utility of all underlying assets. The execution of the engagement was coordinated with our international affiliates in Mexico, Europe and South America. The client deliverables included an electronic asset file with value conclusions for all locations and a narrative report detailing the methodology and conclusions for all tangible and intangible assets. Deliverables were provided in draft form to facilitate the discussions with company management and auditors.

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