Fair value drives latest BV theories

BVWireIssue #143-4
August 27, 2014

“If you think about the development in valuation theory over the last 10 or so years, it has been spearheaded by the area of fair value measurements,” observes Mark Zyla (Acuitas Inc.), speaking during a BVR webinar on fair value. “For example, we are seeing more information on what was formerly known as control premiums, which are now being referred to as market participant acquisition premiums. There is some additional thought by valuation leaders on the appropriate use of those types of premiums in measuring fair value in financial reporting.”

“We are seeing valuation techniques such as the multi-period excess earnings method that is being widely used to measure the fair value of specific intangible assets,” Zyla continues. “Also, we are seeing more thought about the differences in value between the income approach using a discounted cash flow and the market approach and how to reconcile that situation. This whole area of fair value is really driving the latest in valuation theory.”

Zyla will be conducting the AICPA Fair Value Measurements Workshop, a two-day event, on Sept. 29-30 in New York City. It will include:

  • Interactive discussions among participants, including financial statement preparers, auditors, valuation specialists, and, often, regulators;
  • The latest in best practices in valuation of intangible assets for financial reporting purposes;
  • An update on the SEC and PCAOB and their views on fair value measurements; and
  • The impact of the Private Company Council proposals on fair value;

For more information on the workshop, click here.

Extra: The PCAOB has a continuing concern over auditing requirements related to fair value measurements. A new staff paper asks for public comments that may lead to a revised auditing standard.

Please let us know if you have any comments about this article or enhancements you would like to see.