Fair Value Financial Reporting Book

	Preface	xiii
Chapter 1	Impact of Fair Value on Earnings Per Share	1
	Fundamentals of SFAS 141R	2
	Developing Fair Value in a Business Combination	3
	How an Appraiser Looks at Intangibles	10
	Intended Use of Intangible Assets: "Market Participants"	18
	Estimated Life of Assets	20
	Impact on Earnings Per Share of Fair Value Calculations	24
	Conclusion	27
Chapter 2	What Is Fair Value?	29
	Purpose of an Appraisal	30
	Three Different Values Do Not Disprove Appraiser Integrity	32
	Why Two Appraisers Provide Different Results	35
	Importance of Assumptions	36
	Evaluating an Appraisal Report	38
	Accuracy of Appraisal Reports	42
	Conclusion	45
Chapter 3	What Is Fair Value Reporting?	47
	FASB Leads the Way	48
	Balance Sheet versus Income Statement	48
	Changes in Balance Sheets Measure Income	51
	Unrealized Gains Can Be Manipulated to Create Income	53
	Should We Have Fair Value?	55
	Volatility	57
	Concepts Statement 7	59
	FASB's Fair Value Proposals	66
	Conclusion	69
Chapter 4	How Appraisers Develop Fair Value	71
	Basic Valuation Principles	72
	Use of the Three Approaches	73
	Correlating the Answer	75
	Value In-Use versus Value In-Exchange	76
	What Is Value In-Use?	77
	What Is Value In-Exchange?	79
	FASB's Dilemma	81
	Can Fair Value Be Audited?	82
	Market Participants	85
	Income Taxes and Subchapters Considerations in Valuation	88
	Selecting an Appraiser	90
	Conclusion	93
Chapter 5	Allocation of Purchase Price (SFASs 141R and 142)	97
	Is the Purchase Price Equal to Fair Value?	98
	Testing Fair Value	100
	Weighted Average Cost of Capital	102
	Synergies	106
	Comparing SFAS 141R with Its Predecessor, SFAS 141	107
	Transaction Costs	108
	Contingent Consideration	109
	Fair Value of Equity Securities Issued	111
	Contingent Assets and Liabilities	111
	Restructuring Costs	113
	Identifying Specific Intangible Assets	115
	Unpatented Technology	118
	Backlog	119
	Assembled Workforce	119
	Bargain Purchases	123
	Partial Acquisitions and Noncontrolling Interests	124
	Conclusion	127
Chapter 6	Determining the Fair Value of Intangible Assets	129
	Trademarks, Trade Names	129
	Internet Domain Names	136
	Noncompetition Agreements	138
	Customer Lists and Customer Relationships	141
	Customer Relationships	143
	Franchise Agreements	150
	Operating and Broadcast Rights	153
	Patented and Unpatented Technology	154
	Software	155
	Software Developed for Sale to Others	159
	Conclusion	160
Chapter 7	Valuation of Liabilities and Contingent Payments	163
	FASB's New Approach to Liabilities: "Expected Value"	165
	Estimating and Valuing Legal Liabilities	170
	Valuing Environmental Liabilities	176
	Valuation of Contingent Purchase Price	179
	Conclusion	183
Chapter 8	Testing for Impairment	185
	Testing Goodwill for Impairment	185
	Valuing Reporting Units	187
	Phase 2: Implied Goodwill	190
	Testing Identifiable Intangibles with an Indefinite Life	195
	Testing Identifiable Intangibles with a Definite Life	197
	Impairment of Property, Plant, and Equipment	204
	Conclusion	205
Chapter 9	Valuation of Hard Assets and Real Estate	207
	Highest and Best Use	208
	Value In-Use versus Value In-Exchange	210
	Physical Inspection and the Condition of Assets	211
	Accounting Depreciation versus Appraisal Depreciation	214
	Negative Goodwill	222
	Hierarchy of Earnings	227
	Assets Held for Sale	230
	What to Do About Undervalued Assets	231
	Sarbanes-Oxley Required Controls on PP&E	234
	Size of the PP&E Problem	235
	Controlling PP&E	235
	A Perfect Solution	237
	A Workable Solution	238
	Minimum Capitalization Amounts Should Be Raised	240
	Conclusion	241
Chapter 10	In-Process Research and Development	243
	Cost versus Value	244
	Development of In-Process Research and Development	245
	Valuation of IPR&D	247
	Conclusion	261
Chapter 11	Valuation of Inventories and Receivables	263
	True Cost of Inventory	265
	LIFO: Half of Fair Value	268
	Net Realizable Value	270
	Selling Expenses	271
	What Is a "Reasonable Profit"?	272
	Work-in-Process and Raw Materials	273
	Inventory Obsolescence	274
	Summary of Fair Value of Inventories	276
	Valuation of Receivables	277
	Summary of Fair Value of Receivables	280
	Conclusion	281
Chapter 12	Valuing Stock Options	283
	Valuation of Options Under SFAS 123R	285
	Seven Variables of Option Valuation	287
	Valuation Methodology for Stock Options	292
	Developing Supportable Assumptions for the Valuation	294
	Conclusion	300
Chapter 13	Auditing of Valuation Reports and Selecting an Appraiser	303
	Be Careful What You Ask For!	306
	Auditor Review of Valuation Reports	310
	Every Appraisal Has at Least One Key Assumption	313
	How to Choose an Appraiser	316
	Obtaining and Evaluating Proposals for Valuation	317
	Conclusion	322
	Index	323