Professional''s Guide to Fair Value - The Future of Financial Reporting

Informationen zum Autor James P. Catty has been engaged in business valuations around the world for more than fifty years and has undertaken speaking engagements in China, Germany, Romania, Taiwan, Turkey, the U.K., and the U.S. He is Chairman of the International Association of Consultants, Valuators and Analysts (IACVA); President of Corporate Valuation Services Limited (CVS), Toronto; and of counsel to Hanlin Moss, PS in Seattle, Washington, and Xi'an, China. Catty is the author of the Wiley Guide to Fair Value under IFRS. Klappentext An all-encompassing guide to the elements and basics of fair valueWith the important role fair value is playing in the creation of a converged set of global accounting standards, demand for products in this category is growing spectacularly. The elements and basics of fair value are covered, including risk, dealing with the SEC, and details on legal responsibility. In addition, sample financial statements are included, along with tables, recommended applicable techniques, and management checklists for those who are responsible for preparing and approving of financial statements.* Written by the Chairman and co-CEO of the International Association of Consultants, Valuators and Analysts (IACVA)* Includes sample financial statements of both U.S. and foreign companiesAppropriate for anyone involved professionally with finance--managers, accountants, investors, bankers, instructors, and students--The Professional's Guide to Fair Value is a reliable reference on the ins and outs of fair value financial disclosure. Zusammenfassung An all-encompassing guide to the elements and basics of fair value With the important role fair value is playing in the creation of a converged set of global accounting standards, demand for products in this category is growing spectacularly. Inhaltsverzeichnis Preface xi Acknowledgments xv Chapter 1: Significance of Value 1 Business Uses for Valuation 2 Mergers and Acquisitions 2 Financial Reporting 3 Investment Bankers versus Valuators 8 Valuation Requirements 8 Litigation Risks 9 Ten Commandments of Valuation 10 Chapter 2: Fair Value Concept 13 Relevant Pronouncements 14 Definitions 14 Market Participants 15 Fair Value Accounting 16 Revaluation under IFRS 16 Other Types of Value 17 Valuation Principles 19 Reporting and Cash-Generating Units 20 Chapter 3: Fair Value Framework 21 Stage 1: Determine the Unit of Account 22 Stage 2: Evaluate the Premise of Value 24 Stage 3: Assess the Principal Market 29 Stage 4: Establish the Most Advantageous Market 30 Stage 5: Select Appropriate Valuation Methods 33 Stage 6: Estimate Fair Value Conclusions 37 Chapter 4: Taming the Future 41 Definitions 42 Effect of Market Participants' Assumptions 43 Scenario Analysis 45 Scenario Implications 49 Chapter 5: Projecting What Is to Come 53 Base the Future on the Past 54 The Truth Is in the Parts 56 Avoid Unnecessary Risks 59 Garbage In, Garbage Out 63 Believable and Likely Conclusions 66 Quality of Earnings 67 Conclusion 68 Chapter 6: The Market Approach to Fair Value 69 Nature of Markets 70 Classifying Assets 72 Comparable Transactions 74 Guideline Entities 76 Guideline Entities Example 79 Licensed Asset Example 82 Conclusion 84 Chapter 7: The Cost Approach to Fair Value 85 Current Replacement Cost 85 Deductions 87 Integrating the Factors 90 Residual Value 92 Useful Lives 92 Valuing Intangible Assets by the Cost Approach 97 Conclusion 103 Chapter 8: The Income Approach to Fair Value 105 Capitalization ...

List of contents

Preface xi
 
Acknowledgments xv
 
Chapter 1: Significance of Value 1
 
Business Uses for Valuation 2
 
Mergers and Acquisitions 2
 
Financial Reporting 3
 
Investment Bankers versus Valuators 8
 
Valuation Requirements 8
 
Litigation Risks 9
 
Ten Commandments of Valuation 10
 
Chapter 2: Fair Value Concept 13
 
Relevant Pronouncements 14
 
Definitions 14
 
Market Participants 15
 
Fair Value Accounting 16
 
Revaluation under IFRS 16
 
Other Types of Value 17
 
Valuation Principles 19
 
Reporting and Cash-Generating Units 20
 
Chapter 3: Fair Value Framework 21
 
Stage 1: Determine the Unit of Account 22
 
Stage 2: Evaluate the Premise of Value 24
 
Stage 3: Assess the Principal Market 29
 
Stage 4: Establish the Most Advantageous Market 30
 
Stage 5: Select Appropriate Valuation Methods 33
 
Stage 6: Estimate Fair Value Conclusions 37
 
Chapter 4: Taming the Future 41
 
Definitions 42
 
Effect of Market Participants' Assumptions 43
 
Scenario Analysis 45
 
Scenario Implications 49
 
Chapter 5: Projecting What Is to Come 53
 
Base the Future on the Past 54
 
The Truth Is in the Parts 56
 
Avoid Unnecessary Risks 59
 
Garbage In, Garbage Out 63
 
Believable and Likely Conclusions 66
 
Quality of Earnings 67
 
Conclusion 68
 
Chapter 6: The Market Approach to Fair Value 69
 
Nature of Markets 70
 
Classifying Assets 72
 
Comparable Transactions 74
 
Guideline Entities 76
 
Guideline Entities Example 79
 
Licensed Asset Example 82
 
Conclusion 84
 
Chapter 7: The Cost Approach to Fair Value 85
 
Current Replacement Cost 85
 
Deductions 87
 
Integrating the Factors 90
 
Residual Value 92
 
Useful Lives 92
 
Valuing Intangible Assets by the Cost Approach 97
 
Conclusion 103
 
Chapter 8: The Income Approach to Fair Value 105
 
Capitalization Methods 106
 
Income Approach--Discounting 110
 
Terminal Amounts 115
 
Application to Intangible Assets 116
 
Chapter 9: Sources of Value--Profits 121
 
Structure of Businesses 121
 
Innovation 122
 
DuPont Analyses 129
 
Chapter 10: Sources of Value--Risks 135
 
Reducing Risks 136
 
Continual Monitoring and Testing 136
 
Dealing with Biases 138
 
Risk Rate Component Model 139
 
Intellectual Capital Value Drivers 146
 
Conclusion 147
 
Chapter 11: Valuing Liabilities 149
 
Liabilities Transferred Rather Than Settled 150
 
Asset Retirement Obligations 157
 
Contingent Liabilities 158
 
Chapter 12: Business Combinations 161
 
Do Mergers Pay Off? 162
 
Why Merge? 163
 
Determination of Synergies 166
 
Intrinsic and Investment Values 167
 
Quantification 167
 
Chapter 13: Purchase Price Allocation 173
 
Stage 1: Determine the Acquirer 174
 
Stage 2: Establish the Consideration's Fair Value 176
 
Knowledge of the Industry 178
 
Stage 3: Identify All the Items Involved 180
 
Stage 4: Select Appropriate Valuation Techniques 188
 
Stage 5: Estimate Fair Values and Reconcile Rates of Return 190
 
Conclusion 192
 
Chapter 14: Impairment 193
 
Reporting Units 194
 
Cash-Generating Units 196
 
Goodwill 197
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Product details

• Authors: Catty, James P Catty, James P. Catty, Jp Catty, CATTY JAMES P, Catty James P.
• Publisher: Wiley, John and Sons Ltd
• Languages: English
• Product format: Hardback
• Released: 21.02.2012
• EAN: 9781118004388
• ISBN: 978-1-118-00438-8
• No. of pages: 256
• Series: Wiley Corporate F&A; Wiley Corporate F&A (Unnumbere; Wiley Corporate F&A
• Subjects: Social sciences, law, business > Business > Business administration; Rechnungswesen, Bewertung, Accounting, Valuation