Financial executives have the responsibility to present financial information accurately and fairly for their shareholders, creditors, and other interested parties. When preparing financial statements for these groups, firms typically present financial information in keeping with customary accounting standards. These standards require that certain assets and liabilities be measured at fair value.
Fair value measurements can be complex, and it is not unusual for management teams to engage independent valuation firms, such as BVI, to perform these measurements. This is especially necessary when an independent opinion is required or when a company does not have the internal resources and expertise to manage the process. Using BVI also provides assurance to CPAs that audit the firm’s financial statements that the fair values have been determined objectively and are well-supported.
When are valuations necessary for financial reporting?
Fair value measurements are required by the FASB Accounting Standards Codification in a variety of circumstances, including:
to support the allocation of the purchase price when a business is acquired
to support testing of assets, such as goodwill, for impairment
to support fair value measurement of financial instruments that are not actively traded in an organized market
to support disclosure and compensation expenses related to equity-based compensation plans, including stock options
The Business Valuation, Inc. Advantage
BVI is experienced in providing a broad range of valuations to support fair value reporting requirements. We work with both privately held and publicly traded companies that range in size from start-up companies to companies that generate over $1 billion in annual revenue. Our resources, expertise, and credibility in presenting well-documented valuation reports to auditors and other reviewers are a few of the primary reasons that financial executives select BVI.
Who can benefit from financial reporting valuations?
Financial executives and CPAs benefit from BVI’s experience and expertise in analyzing valuation issues for financial reporting purposes. BVI efficiently uses the time and resources of both the executives and the auditors, while providing well-supported valuation reports.