Authoritative Documents
Over the years, we have collected a lot of authoritative documents, including best practices documents from different professional associations, regulators, international accounting firms (Deloitte, PWC, and EY) and leading valuation experts.Call us with any questions and we will share our library resources to assist you with your asc805 (Business Combination).
Regulatory Background - asc805 Fair Value for Private Companies
In 2009, responding to growing criticism that intangible asset valuation had grown too complex and costly (including the cost of the review of the client’s valuation analysis by the accounting firm’s internal valuation experts), FASB took steps to create the Private Company Council to examine if a lower level (read: lower cost) of required reporting could still provide useful information to users of private company financial statements.In 2014, FASB adopted the Private Company Council’s guidance as presented in ASU 2014-18 (Business Combinations) which allowed private companies, but not public companies, to limit the scope of their identification of certain intangible assets as part of their financial reporting compliance when they make acquisitions (i.e., business combinations) or do “fresh start” accounting in a re-organization.
Private companies still need to record the fair value and remaining lives for the acquired intangible assets, but now they have the benefit of considering a limited number of intangible assets that they need to value and record on their books.