Financial Reporting Valuations

Why use valuations for financial reporting?

Financial executives have the responsibility to present financial information accurately and fairly for their shareholders, creditors, and other interested parties. When preparing financial statements for these groups, firms typically present financial information in keeping with customary accounting standards. These standards require that certain assets and liabilities are measured at fair value.

Fair value measurements can be complex and it is not unusual for management teams to engage independent valuation firms, such as BVI, to perform these measurements. This is especially necessary when an independent opinion is required or when a company does not have the internal resources and expertise to manage the process. Using BVI also provides assurance to CPA’s that audit the firm’s financial statements.

When are valuations necessary for financial reporting?

Fair value measurements are required by the FASB Accounting Standards Codification in a variety of circumstances, including:

  • to support the allocation of the purchase price when a business is acquired
  • to support testing of assets, such as goodwill, for impairment
  • to support fair value measurement of financial instruments that are not actively traded in an organized market
  • to support disclosure and compensation expense related to equity-based compensation plans, including stock options

Why use BVI?

BVI is experienced in providing a broad range of valuations to support fair value reporting requirements. We work with both privately held and publicly traded companies that range in size from start-up companies to firms that generate $1 billion in annual revenue. Our resources, expertise, and credibility in presenting well-documented valuation reports to auditors and other reviewers are some of the primary reasons that financial executives select BVI.

Who can benefit?

Financial executives and CPAs benefit from BVI’s experience and expertise in focusing on valuation issues for financial reporting purposes. BVI efficiently uses the time and resources of both the executives and the auditors, while providing well-supported valuation reports.