Purchase Price Allocations Beacon provides PPA valuations for financial reporting purposes, in accordance with ASC 820 (formerly SFAS 157) and ASC 805 (formerly SFAS 141R). PPAs entail allocating the total purchase price in an acquisition to the acquired tangible and intangible assets that are recognized separately from goodwill, based upon a rigorous determination of their fair values. The analysis includes an estimation of asset remaining useful lives.
The benefits of a Beacon PPA include:
1. Tailored valuation approach based on business context and Beacon’s industry expertise. 2. Knowledge of the SEC’s key areas of concern. 3. A deliverable for presentation to the SEC. 4. Pre- and post-deal analysis and advice. 5. Rapid mobilization of Beacon’s resources. 6. Management assistance with seller negotiations.
Beacon helps you meet market and regulatory requirements.
Goodwill Impairment Beacon performs the required analysis and consultation to test goodwill for impairment under ASC 820 (formerly SFAS 157) and ASC 350 (formerly SFAS 142). Beacon provides valuable assistance from the identification of reporting units to the determination of their fair values.
When performing Goodwill Impairment services, Beacon: 1. Helps identify reporting units (“RU”) and assists companies in understanding the implications of RU structure. 2. Assigns any acquired assets and liabilities, including goodwill and corporate items, to one or more RU’s. 3. Determines fair value of RU’s and their underlying intangibles. 4. Computes implied fair value of goodwill. 5. Documents the entire valuation analysis in a concise valuation report. 6. Ensures applicability of methods used for future impairment tests.
Beacon’s Goodwill Impairment analysis reflects a comprehensive understanding of the accounting rules and the key issues of concern to the SEC.
In-Process Research and Development Valuations of research and development in the pipeline are performed principally for financial reporting purposes. Beacon has significant expertise in valuing in-process research & development (“IPR&D”) in the technology and pharmaceutical industries.
Analysis is done in accordance with ASC 820 (formerly SFAS 157), ASC 805 (formerly SFAS 141R) and AICPA guidelines.
1. A discounted cash flow methodology is generally employed. 2. Analysis reflects requisite asset charges, appropriate discount rates reflecting market and technical risk, and estimates of remaining useful lives. 3. Quantitative and qualitative approaches are used to compute the discount rate.
Corporate Brand Valuation Corporate brands are highly valuable assets and their values are becoming increasingly important in a variety of corporate transactions and activities. The tracking of corporate brand values on an ongoing basis can benefit management internally and be used as a strategic planning and evaluation tool aimed at maximizing value for the company’s stakeholders. Value-based corporate brand tracking systems can also be used as a means of monitoring marketing efficiency, improving marketing budget allocation, and highlighting marketing’s contribution to the bottom line in financial terms.
Beacon Valuation Group’s proprietary Corporate Brand Valuation methodology is designed to explore the relation between a business enterprise, its underlying key intangible assets, goodwill, and ultimately, corporate brand value. The valuation of corporate brand, perhaps the most esoteric of all assets held by a corporation, is a function of thoroughly identifying, isolating, and quantifying the economic value of that complex array of forces that make up corporate brand. In many cases, these forces may be dominated and led by the intangible assets held by the enterprise. In all cases, it must be recognized that a corporate brand would not exist were it not for the presence of the elaborate combination of elements embodied in the intangible assets unique to and held by the enterprise being examined.
Section 482 Transfer Pricing Analysis (IP Transfers) Transfer pricing takes place within non-arm’s-length transactions, generally between subsidiary and parent company. In Section 482 of the Internal Revenue Code, the IRS requires that such transactions be consummated under an arm’s length standard. Therefore, transfer charges between related entities should be determined by at least the following three methods:
Frequently, however, especially when the transfer of intellectual property involves a newly formed domestic or off-shore entity (“Newco”), the CP or PS methods may not be the most appropriate approaches to pursue. Given the short operating history of the Newco, any precedent for the Company’s relevant transactional profitability, even if available, could not be considered as exhibiting representative profitability, since there exists no history to which a comparison for reasonableness could be made. Beacon’s thorough analysis of the entities’ unique transfer, tempered by our rigorous and systematic utilization of the most appropriate method(s) and our examination of the most relevant market transactional data, is designed to ensure that our clients remain in accordance with the guidelines of Section 482, whether dealing with intangibles such as technology and patents, or trade secrets and know-how.