Financial Reporting A Comprehensive Solution for Valuations for Financial Reporting

Financial Reporting

Extensive experience in delivering audit ready and defensible valuations in a timely manner

Our financial and tax reporting valuation team possesses numerous years of experience in providing valuation services for financial reporting and supports clients through the entire reporting life cycle, including detailed discussions with the clients, issuing valuation reports and addressing any questions from the client’s auditors. All valuations utilize internationally accepted valuation standards. Our deliverables are compliant with all global accounting and reporting standards, and our valuations are audited by big-4 audit firms.

Purchase Price Allocations (PPA)

When a company acquires a controlling ownership in another company, accounting standards require the acquirer to consolidate the financial statements of the target company, allocate the purchase price paid into various identifiable assets and liabilities of the target company, and record these assets and liabilities at their fair values. Any excess purchase price is recorded as goodwill arising from the transaction. The process involves fair valuation of the purchase price, identification and fair valuation of all assets and liabilities of the target company, including intangible assets.

We specialize in PPAs that meet the requirements of global accounting standards, including U.S. GAAP ASC 805, IFRS 3, lndAS 103. Our Purchase Price Allocation services cover the following:

  • Fair Valuation of the assets and liabilities of the target company;
  • Identification and fair valuation of intangible assets consistent with accounting standards;
  • Determination of the purchase consideration
  • Fair value of various components of the purchase consideration, including earnout contingent consideration (earnout), rollover equity, shares/bonds/debentures, convertible securities issued to the sellers of the target company;
  • Determination of goodwill resulting from the transaction;
  • Determination of deferred taxes arising as a part of the transaction;
  • Supporting the client and their auditors to resolve any valuation questions;
  • Issuing a report of our findings.

Impairment Analysis

After initial recognition of goodwill acquired in a business combination, accounting standards require goodwill and indefinite-lived intangible assets to be tested for impairment either annually or upon the occurrence of a trigger event. The process involves determination of the fair value of equity of every reporting unit/cash generating unit (CGU) and determining the impairment if any.

We specialize in impairment analysis meeting compliance requirements of various global accounting standards, including U.S. GAAP ASC 350/360, IAS 36 and lndAS 36. Our Impairment testing services cover the following:

  • Determination of the CGUs that need to be evaluated for impairment;
  • Determination of the fair value of equity and total assets of the CGU;
  • Performing an equity and asset test against the carrying to determine the existence of impairment
  • Determination of impairment loss;
  • Supporting the client and their auditors to resolve any valuation questions;
  • Issuing a report of our findings.

Portfolio Valuations

Global Accounting Standards require that investments made by an investment company be reported at fair value on every reporting period. Accounting standards classify assets based on their degree of liquidity, with Level 1 being those investments with a high degree of liquidity and level 3 assets being the most illiquid. Private Equity, Venture Capital, Insurance Companies and Hedge Funds are required to perform ongoing evaluations to monitor their illiquid investments.

We work with private equity, venture capital firms and other investment firms and provide them with valuations which are compliant with global accounting standards and auditor expectations. We specialize in portfolio valuations meeting compliance requirements of various global accounting standards, including U.S. GAAP ASC 820, IFRS 13 and lndAS 113. Our Portfolio Valuation services cover the following:

  • Collaborate with the client and the portfolio companies to gain an understanding of the nature of the investment and analyze the key terms of the investment;
  • Determination of the fair value of all types of instruments, including equity, debt, convertible debt, SAFEs and complex securities under the portfolio of the reporting entity;
  • Providing a summary of the fair value of all holdings and comparison against the investment cost and the fair value on the preceding reported period;
  • Supporting the client and their auditors to resolve any valuation questions;
  • Issuing a report of our findings.

Stock-Based Compensation (ESOPs)

Companies issue stock options in lieu of salary, and global accounting standards require any stock-based compensation to be expensed at the fair value of the stock option. The process involves determining the fair value of the underlying stock and using a relevant model to determine the fair value of the option. The Black Scholes Merton model is the most commonly used model to determine the fair value of the stock option.

We specialize in valuations of stock options meeting compliance requirements of various global accounting standards, including U.S. GAAP ASC 718, IFRS 2 and lndAS 102. Our stock option valuation services cover the following:

  • Discuss with the client and gain an understanding of the stock option scheme and its terms and conditions, exercise and vesting terms;
  • Perform a valuation of the underlying stock;
  • Determine the fair value of the option based on a suitable methodology;
  • Supporting the client and their auditors to resolve any valuation questions;
  • Issuing a report of our findings.