New York (Nov. 1, 2019) – Valuation Research Corporation (VRC), a leading global provider of independent valuation support and advisory services, today announced that Co-CEO PJ Patel has been selected as a formal participant and speaker at the Financial Accounting Standards Board’s (FASB’s) upcoming roundtable on Identifiable Intangible Assets and Subsequent Accounting for Goodwill. VRC recently conducted a survey of public company financial statement preparers and users on the topic and Patel plans to convey key issues and concerns they raised to the standard-setting body.
The FASB is considering potential changes to how goodwill—intangible assets that are reflected in a merger & acquisition context by the premium paid over the value of identified assets—is valued, periodically tested for changes in value (or “impairment”) and reflected in financial statements.
“We’re gratified the FASB invited us to participate in their dialogue on this important topic,” said Patel, who has spent more than two-decades focusing on intangible asset valuation. “There is about $3 trillion in goodwill assets on the balance sheets of S&P 500 companies alone, so it’s critical that the Board gets it right. We have our own views and laid them out in a comment letter we submitted in early October. But in this forum, I want to share the full range of viewpoints from our formal surveys and conversations with companies that prepare financial statements and the investors who use them.”
The FASB received nearly 100 comment letters on the proposal and invited select experts—financial analysts from the buy- and sell-side, corporate finance professionals, industry practitioners, and international stakeholders—to elaborate on their views at the Nov. 15 roundtable.
Valuation Research Corporation is a full-service, independent, global valuation firm. Since 1975, our network of over 1,300 valuation professionals has provided objective, supportable conclusions of value to domestic and international clients. The company’s core services include financial opinions with respect to valuation, solvency, capital adequacy and fairness in connection with mergers, acquisitions, divestitures, leveraged buyouts, recapitalizations, financings, and financial and tax reporting matters. VRC has locations in Atlanta, Boston, Chicago, Cincinnati, Dallas, Milwaukee, New York, Princeton, San Francisco, and Tampa; as well as international member firms in Argentina, Australia, Brazil, Canada, China, Colombia, Germany, India, Japan, Luxembourg, Mexico, Singapore, Spain, and the United Kingdom.
More Perspectives: Goodwill Impairment
Goodwill Impairment: Preparer Survey Summary
We polled our clients for their thoughts on the current accounting for goodwill and intangible assets and have summarized our findings.
Goodwill Impairment: User Survey Summary
To better understand the needs and views of “users” of financial statements, VRC surveyed financial analysts, a group mainly comprised of CFA charterholders, who conduct fundamental analysis on public companies.
First, Do No Harm
Opinion: The FASB is soliciting feedback on whether and how to further simplify the accounting for goodwill and intangible assets for public companies. This may be setting off down a harmful course of accounting treatment.
VRC Provides Constructive Input to the FASB on Goodwill Impairment
Response to the FASB suggests a number of ways current impairment testing could be improved and streamlined.
The Current State of Goodwill & Impairments
A video discussion about corporate goodwill, goodwill impairment, and financial analysis techniques that aid in determining if a business combination is living up to performance expectations.
The Data Behind the Video
Download the detailed presentation, which includes the latest graphics, statistics, and purchase price allocation examples on goodwill, courtesy of Calcbench.