Valuation for financial reporting is distinguished by its purposes and procedures. With the increasing fair value demand by US GAAP and IFRS, the scrutiny from big 4 auditors and SEC, overseas listed companies are in more and more need of support from seasoned valuer to help them prepare the related work with high quality on time.
We have been working closely with Big 4 accounting firms for various projects and accumulated valuable knowledge in dealing with auditor’s and SEC’s comments. We can help client to be as confident as possible even before the job begin.
Stock Option Valuation
Companies seeking overseas listing will normally grant stock options in lieu of cash salary. According to the related accounting standard, the fair value of the stock options granted shall be recorded as cost or expenses.
Both US and HK SEC will scrutinize the valuation of stock options from certain perspective to determine if they are undervalued and manipulation of the financial performance exist. We have extensive experience in this regard and can communicate with client beforehand the related issues so as to help client avoid restatement of the financial statements and delay of their IPO process.
Intangible Assets Valuation in Business Combination
According to US GAAP and IFRS, companies are required to restate the assets and liabilities of target companies to their fair value and the same time value and record those identifiable intangible assets at fair value upon acquisition or significant investment into the target company(including but not limited to customer relationship, brand, trademark, know-how, technology, franchise agreement, etc.).
We have a lot of successful cases within the area. We can help our client with the financial statements compilation and disclosure with high quality and within a reasonable time period.
Financial Instruments Valuation
Financial instruments are used extensively. It covers preferred stock, convertible bond, interest rate swap contract and contingent consideration.
The accounting treatment of financial instrument is very complicated. Especially in determining the host contract, the embedded options, etc. The accounting requirement always raises big challenges to valuation, such as the true consideration, consideration of valuation assumptions and financial report reasonableness, etc. We can select the most appropriate valuation method according to auditor’s requirement to help client with a reasonable estimate to stand the stringent challenges from various angles.
Impairment Test of Intangible Assets
With the increasing frequency of occurrence of financial crisis during recent years, impairment loss of intangible assets and goodwill are frequently seen on companies’ financial statements. US has updated the related accounting and valuation guidance and setup some new rules. We value it most to help our client to adapt to the new situation by applying the related guidance prudently and reflecting the actual performance.
