Statement of Financial Accounting Standards No. 157, Fair Value Measurements, applies whenever other standards require (or permit) assets or liabilities to be measured at fair value. This book explains this new rule to non-valuation experts. The tentative chapters are: (1) Just What Is Fair Value; (2) Valuation of Your Business: What Is It Really Worth?; (3) M (4) Customer Relationships; (5) Testing for Impairment; (6) Valuation of Liabilities; (7) Fair Value and Sarbanes-Oxley; (8) Litigation and the True Determination of Value; (9) Valuation of Options for Compensation; (10) Maximize the Value of Your Intellectual Property; (11) Future of Fair Value Reporting; and (12) Selecting an Appraisal Specialist.
Book Details:
- Author: Alfred M. King
- ISBN: 9780470173299
- Year Published: 2008
- Pages: 272
- BISAC: BUS001000, BUSINESS & ECONOMICS/Accounting / General
About the Book and Topic:
Statement of Financial Accounting Standards No. 157, Fair Value Measurements, applies whenever other standards require (or permit) assets or liabilities to be measured at fair value. This book explains this new rule to non-valuation experts. The tentative chapters are: (1) Just What Is Fair Value; (2) Valuation of Your Business: What Is It Really Worth?; (3) M (4) Customer Relationships; (5) Testing for Impairment; (6) Valuation of Liabilities; (7) Fair Value and Sarbanes-Oxley; (8) Litigation and the True Determination of Value; (9) Valuation of Options for Compensation; (10) Maximize the Value of Your Intellectual Property; (11) Future of Fair Value Reporting; and (12) Selecting an Appraisal Specialist.
The Financial Accounting Standards Board (FASB) has implemented a major change in financial reporting. It changed the requirements for increasing categories of assets and liabilities to be shown at current fair value. These changes affect the balance sheet as well as profit and loss statements. The FASB has required corporations to book their assets and liabilities according to the price that they paid for them. If the assets went down in value, they were written down; if they went up, no entries were made. The emphasis in financial reporting was on conservatism and measuring the performance of management through the P&L statement. However, because assets on company books went up and down, the balance sheet often did not reflect the “true value” of assets and liabilities. Companies were able to sell assets on which they had a gain and record a profit–this distorted “real” operating profit. By using the FASB’s changes, companies will be able to have their books correctly reflect the true value of their assets and liabilities.
Challenging subject: When the FASB passed its fair value Standard No. 157, the accounting and valuation community realized that it would be a challenge to implement. With the passage of SOX and other regulations, senior level corporate financial managers must now understand the standard and ensure that it is being implemented properly. One CEO has stated that the move to fair value accounting is going to be a complete disaster. At some point you are going to need a Ph.D in accounting to figure it out. This book presents in basic terms the basics of fair value accounting. Provides overview of subject: Financial accounting is being replaced by fair value accounting. This book brings senior level executives up to speed. It provides a discussion of valuation, M&A transactions, Sarbanes-Oxley, liabilities, and intellectual property. The C-level group will definitely walk away with a thorough knowledge of what fair value accounting is and how it impacts their corporation and its profitability. Author is acknowledged expert: Al King is considered a leading authority in the valuation arena. He has over 25 years of experience. He is a frequent presenter at conferences sponsored by the IMA, NACVA, and AICPA.
About the Author
Alfred M. King (Spotslyvania, VA), CMA, is the Vice Chairman of Marshall & Stevens and the former Chairman of Valuation Research Corporation, both are national firms of appraisers. In addition, he is the Chairman of the Accounting Committee of the Institute of Management Accountants. He speaks at various conferences (IMA, AICPA, NACVA) on valuation issues.