Axiom Valuation provides expert, cost-effective, custom valuation services for acquisitions for compliance with the recently instituted Financial Accounting Standards Board (FASB) 141 and 142. We provide:

• Valuation services for allocation of the acquistion purchase price among tangible assets, specific intangible assets, such as customer lists, and goodwill, consistent with FASB 141;
• Annual Testing for possible value impairment consistent with FASB 142;
• Valuation services for allocation of current year value among tangible assets, specific intangible assets, such as customer lists, and goodwill to determine if goodwill has been impaired, consistent with FASB 141 and 142; and
• Fairness Opinions related to FASB 141 allocations and 142 testing procedures.

Valuing Acquisition Intangibles and Goodwill

The purpose of FASB 141 and 142 is to provide investors with better financial information as to the success of past acquisitions. In the process of doing this, the FASB has forced firms to deal with a number of thorny and confusing valuation issues. These issues include:

• Determining an appropriate attrition rate for customers on acquired customer lists
• Valuing the reporting unit from the perspective of hypothetical new buyer or from the perspective of the acquiring firm implementing its strategy for deploying the acquired assets.
• Applying a marketability discount to the value of a reporting unit when the unit no longer has equity trading in a liquid market.
• Estimating the proper cost of capital when the discounted cash flow approach is used to value the reporting unit.

Axiom Valuation has developed appropriate methods for addressing each of these issues to meet the FASB 141 and 142 requirements.

For more information about valuing acquisition intangibles and goodwill, read Dr. Stan Feldman's paper Calculating Goodwill Impairment: Valuation Issues Raised by Financial Accounting Statement 142

Independence

FASB requires that the valuations related to application of the rules of FASB 141 and 142 be conducted by or reviewed by a valuation expert, independent of the firm needing the valuation and the firms' auditor. Axiom Valuation is an independent valuation expert.