Real options represent the application of option-pricing models to the valuation of strategic investment opportunities where future decisions can be made contingent on the resolution of uncertainty.
Read More
Valuation
Asset Impairment: Special Considerations
Many parts of impairment test are based on the concept of fair value. Fair value standard is used as part of impairment testing of PP&E, intangible asset subject to amortization, goodwill and other indefinite-lived intangible assets.
Read More
Monte Carlo Simulation: Examples
A Monte Carlo simulation uses samples of input data together with a known mathematical model to predict probabilistic outcomes.
Read More
What is Goodwill?
In our opinion, FASB’s analysis of goodwill provided in Basis for Conclusion of FAS 141, Business Combinations provides well-structured and cohesive conceptual understanding of goodwill. This understanding can be used in addressing practical valuation and accounting questions related to transactions with businesses.
Read More
Is ChatGPT taking over valuation?
The purpose of this publication is to assess ChatGPT’s ability to access certain valuation information, answer specific valuation questions.
Read More
Backsolve Valuation Method
The main idea behind the Backsolve method is to use recent transaction price for one of the classes of shares, Black-Scholes option pricing model and other additional information that can be derived from company’s capital structure to determine estimated fair value (FV) of equity.
Read More
Estimating Borrowing Rates
Pre-tax cost of debt is used in financial reporting in accounting for leases and application of effective interest rate method in accounting for debt.
Read More
Confusion About Fair Values
Use of fair market value standard of value in current valuation practices causes confusion and results in additional unnecessary work.
Read More