Brett Cooper (PCE Valuations) reports “Accounting Standards Codification (ASC) 852 addresses the financial reporting requirements required by U.S. GAAP for fresh start reporting.  It requires that the value of the emerging entity be determined using the Fair Value standard and specifically discusses use of the discounted cash flow (DCF) method of valuation.” Cooper adds: “When forecasting the outcome of an emerging entity, it would not be good to rely on pre-petition financial statements. The pre-petition entity is likely to be radically different from the emerging entity.”

Cooper outlines the elements that should be considered in his article here.