GAAP has changed, and all companies, public and private, are subject to the new accounting rules. SFAS 141 must be applied in valuing a transaction and measuring its impact on future earnings. Goodwill must be initially recognized as an asset in the financial statements and measured as the excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired and liabilities assumed. SFAS 142 must be applied when a company has made acquisitions resulting in goodwill. With the adoption of SFAS 142, amortization of goodwill is no longer required or permitted. Instead, goodwill must be tested for impairment at least annually at the reporting unit level using a "fair value" test.
Strategic Equity Group possesses particular expertise in helping clients comply with SFAS 141 and 142. In a coordinated effort, the Firm will assist management, their accountants, and attorneys in an effort to:
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Determine reporting units; |
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Allocate previously acquired goodwill and intangible assets to the reporting units; |
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Identify and determine the fair value of intangible assets; |
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Estimate the remaining useful life of intangible assets; |
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Determine the fair value of the goodwill reporting units; |
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Allocate the purchase price of acquired entities to assets, liabilities and goodwill of the reporting units; and |
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Test for goodwill impairment on an ongoing basis. |
Strategic Equity Group is on the cutting edge in compliance with SFAS 150, having just completed engagements for several noteworthy clients. Please contact us for more information regarding our expertise in this area. The Firm has performed these analyses for numerous publicly traded and privately held companies. Big 4 and other national and regional accounting firms have accepted our conclusions. Contact the professionals at Strategic Equity Group to discuss how this expertise can be applied to your unique situation.