Fair Value Measurements and Reporting for 2012
The Knowledge Congress has assembled a panel of thought leaders to provide in-depth discussions of the latest topics on fair value measurements and reporting. In a two-hour live webcast, our speakers will offer valuable analysis and practical guidance on the significant issues in the mix including:
- Overview of Fair Value Measurements and Reporting
- Valuation of Income Producing Properties
- Legal Issues and Auditing Issues Related To Fair Value
- Assets Valuation
- Financial Instruments
- And so much more!
John Lehman, Financial Advisory Services Director,
Sirius Solutions LLLP
** Speaker Talking Points to be added soon.. **
Linda MacDonald, Senior Managing Director,
Fair value reporting continues to be the focus of attention for many entities and their Boards, auditors, and regulators.
- Issues around the application of the fair value concepts in GAAP continue to come up in SEC investigations
- Some recent SEC releases
- Private equity funds
Many of the issues go back to the basics
- Fair value reporting largely follows the fair value concepts introduced into U.S. GAAP by FAS 157, now codified in ASC 820. The U.S. GAAP is now substantially converged with the issuance of IFRS 13.
- For the fair value measurements used in financial reporting, the objective is an exit price
- In coming up with a fair value measurement, various models and estimation techniques apply
- In all cases, observable inputs are important
- The weight given to those inputs will depend on the extent to which they are relevant to the item that is the subject of the measurement
- That determination will necessarily involve varying degrees of analysis and judgment, which, in some cases, is subject to second guessing
- Consistency in valuation methodology is important; however, changes are appropriate if they result from better or new information and are not the result of an “error”
Initiatives to address application issues
- FASB emphasis on fair value disclosures, with special consideration being given to nonpublic entities
- PCAOB emphasis on the use of third party pricing sources and the auditor’s procedures when auditing fair value measurements developed using third party pricing sources
- SEC emphasis on disclosures about fair value measurements using third party pricing sources
- SEC concerns about the lack of structure within the valuation profession
- SEC Financial Reporting Series, with inaugural program focused on uncertainty in fair value (and other) accounting measurements
Steps to avoid (or mitigate) the issues going forward
- Evaluate internal controls
- Develop, update, and communicate policies and procedures
Christopher W. Mears, CPA, Principal-in-Charge,
- The new disclosure requirement includes a description of the valuation process for level 3 investments.
- A Tabular disclosure of the quantitative disclosures of significant unobservable inputs for level 3 measurements will be required for year end financial statements
- The PCAOB established a Pricing Sources Task Force to gain insight into current issues to related to the auditing the fair value of financial instruments.
- The valuation process: what typically goes wrong during an audit of the fair value of financial instruments.
Raymund Wong, Senior Consultant,
NERA Economic Consulting
- The continuing evolution of fair value reporting has highlighted longstanding challenges of reconciling current fair values of assets with the historical cost emphasis of double-entry bookkeeping.
- Complexities related to modern public companies’ requirements to simultaneously report holdings of marketable securities, acquired entities, and core operations can distort the interpretation of a company’s financial position by investors, regulators, and other market participants, particularly during periods of market turmoil.
- In a world of increasingly complex financial instruments and requirements for greater detail and transparency in financial reporting, dynamic interpretation of financial reporting and valuation results is critical, facilitated by cross-discipline expertise.
David McKnight, Consultant,
NERA Economic Consulting
Determining the “fair value” of financial instruments at a particular point in time is often an important issue in litigation and commercial disputes. When markets are efficient the price at which parties transact is the presumptive “fair value” of the security; however, in the absence of efficient markets or reliable pricing data other valuation methods must be used. This presentation will discuss:
- Instances when market prices may not be reliable and tests for market efficiency;
- The most important factors that influence the value of a financial instrument; and
- Some common models that can be used to determine “fair value” in the absence of market prices.
Who Should Attend:
- Business Officers
- Financial Directors/Analysts
- Valuation Analysts
- Other Related Professionals
John Lehman is a Director in the Financial Advisory Services practice area at Sirius Solutions where he partners with clients on projects involving financial reporting and SEC compliance. He has extensive experience in interpreting and applying SEC reporting requirements within multiple industries, including the oil and gas, energy, services and manufacturing sectors. John has assisted clients in the execution of property acquisitions, initial and secondary public offerings, private placements and reverse mergers.
John’s experience spans across the following transactions: business combinations (including purchase accounting, mergers and acquisitions), share based compensation and arrangements, fair value, complex derivative financial instruments and commodity hedging activities. In addition, he has completed initial and secondary public offerings, private placements, reverse mergers, comfort letters related to public debt/equity financings and SEC compliance and reporting (including pre-clearance letters to the SEC), registration statements on Form S-1 and Form 10, responding to SEC comment letters and corresponding with the SEC CorpFin and OCA. His background also includes ongoing reporting in both the U.S. (NYSE, NASDAQ, AMEX and OTCBB) and the U.K. (the London Stock Exchange) for publicly-traded entities.
John holds a BBA in Accounting from the University of Texas in Austin.
John Lehman is a Director in the Financial Advisory Services practice area at Sirius Solutions where he partners with clients …
Linda MacDonald is a senior managing director in the FTI Consulting Forensic and Litigation Consulting practice and is based in New York. Ms. MacDonald has nearly 25 years of professional experience in financial accounting and reporting. Since joining FTI Consulting in August 2008, Ms. MacDonald has served as a testifying and consulting expert in connection with various litigation matters, many involving the application of generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) by financial institutions, hedge funds, and publicly held entities.
Ms. MacDonald joined FTI Consulting after nearly 12 years at the Financial Accounting Standards Board (FASB), where she was a director. While at the FASB as a director and before that as a project manager, she was involved in establishing U.S. accounting standards and coordinated with the International Accounting Standards Board (IASB) in London on convergence with IFRS. She managed the projects that established the FASB’s accounting standards on fair value measurements (SFAS 157), restructuring obligations (SFAS 146), and asset impairments and disposal activities, including discontinued operations (SFAS 144), and advised on implementation of the standards after they were issued. She also was involved in various initiatives to address complexity in financial reporting, including the FASB’s initiative on principles-based standards.
Ms. MacDonald began her career as an auditor for a national public accounting firm (now Deloitte & Touche). She later joined the U.S. Securities and Exchange Commission (SEC) in Washington, DC, where she was a member of the staff of the Division of Enforcement. While at the SEC, she worked on investigations into possible fraud and violations of GAAP and generally accepted auditing standards (GAAS) associated with the financial statements of public companies. After leaving the SEC, she held positions with national public accounting firms where she worked on various litigation matters.
Ms. MacDonald holds an M.B.A in finance from American University and a B.A. in economics and management from Albion College, and is a certified public accountant. She is a former member of the Technical Standards Subcommittee of the AICPA Ethics Committee and of the AICPA Not-for-Profit Fair Value Task Force. She has been a frequent speaker on accounting topics at national industry and professional conferences and other events.
Ms. MacDonald has contributed to FASB publications, including “Some Facts about Fair Value” (May 2008) and “The IASC-U.S. Comparison Project: A Report on the Similarities and Differences between IASC Standards and U.S. GAAP” (1999). Other publications include “Fair Value Changes Ahead,” The CPA Journal (January 2010) and “Don’t Bury Fair-Value Accounting Just Yet,” Conde Nast Portfolio.com (October 7, 2008).
Linda MacDonald is a senior managing director in the FTI Consulting Forensic and Litigation Consulting practice and is based in …
Chris Mears is the principal-in-charge of Rothstein Kass’ New York Metro financial services group. He has over 17 years of experience in financial services, with a particular emphasis on investment partnerships, offshore funds and private equity funds. Chris advises alternative investment clients at the initial organizational phase to address the accounting and tax matters that may have an impact on the fund. After fund formation, he typically oversees all services provided to the fund by the Firm, including the audit and ongoing consultation regarding many diverse operational, transactional and tax matters.
Chris earned a Bachelor of Science degree in accounting from Rutgers University in 1989. He is a member of the New Jersey Society of Certified Public Accountants (NJSCPA) and the American Institute of Certified Public Accountants (AICPA). Chris joined Rothstein Kass in 1992 as a senior accountant. In 2000, Chris was promoted to principal and currently serves on the Firm’s executive committee. Chris is a frequent speaker at various conferences as well as firm marketing events, has been quoted by various publications including the Wall Street Journal and has authored articles pertaining to hedge funds and private equity.
Chris Mears is the principal-in-charge of Rothstein Kass’ New York Metro financial services group. He has over 17 years of …
Mr. Wong specializes in accounting and financial economics. He has devised and implemented analyses for numerous general advisory and litigation projects. His areas of expertise include broker/customer disputes, mutual fund litigation, forensic accounting, insider trading, leasing and leveraged leasing, securities class action litigation, and valuation.
Mr. Wong has been retained to issue valuation reports on the various equity, debt, and derivative securities of private companies with complex capital structures. He has served as the damages expert in mediations involving brokerage firm customers with churning and suitability claims. He has also been retained as a consulting expert on cases involving forensic accounting issues and the valuation impact of alleged accounting fraud.
Mr. Wong holds a master of accounting and a bachelor of economics from the University of Michigan. He is a CFA charterholder and a Certified Public Accountant, and is Accredited in Business Valuation by the AICPA.
Mr. Wong specializes in accounting and financial economics. He has devised and implemented analyses for numerous general advisory and litigation …
Mr. McKnight is a member of NERA’s securities and mass torts practices and specializes in financial economics and statistics. His areas of expertise include quantitative finance, securities class action litigation, forecasting mass tort claims, and insurance and reinsurance valuation.
As a member of the Securities Practice, Mr. McKnight has computed damages for classes of stock, option and bond holders, analyzed claims of fraudulent conveyance, and assessed the merits of class certification. As a member of Mass Torts Practice, Mr. McKnight has forecasted future liabilities for personal injury claims resulting from exposure to asbestos, silicosis, pollution, and drugs and medical devices, and allocated projected losses to available insurance coverage.
Mr. McKnight received his B.A. in mathematics from Vassar College and his M.S. in mathematics from the New York University Courant Institute of Mathematical Science, where he specialized in analysis, probability, and statistics.
Mr. McKnight is a member of NERA’s securities and mass torts practices and specializes in financial economics and statistics. His …
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About Sirius Solutions LLLP
Sirius Solutions, L.L.L.P. is an independent business consulting firm specializing in the areas of Financial Advisory, Business Operations, Compliance & Controls, Legal & Economic Advisory and Technology. Our mission is to integrate commercial business experience and deep subject matter expertise for senior management, providing sustainable solutions to complex business challenges. With a base of professionals averaging more than 15 years experience, we serve clients in over forty countries across a wide range of major industries, including construction, energy, financial services, health care, manufacturing and transportation. Our clients experience results such as a shortened financial close process, higher levels of regulatory compliance, and operational best practices. Sirius Solutions is headquartered in Houston, Texas and has offices in London, New York and Dallas. Sirius Solutions is not a CPA firm.www.sirsol.com.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 3,800 employees located in 24 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management, strategic communications and restructuring. The company generated $1.56 billion in revenues during fiscal year 2011. More information can be found at www.fticonsulting.com.
About Rothstein Kass
About NERA Economic Consulting
NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For half a century, NERA’s economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.
NERA’s clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world’s largest economic consultancies. With its main office in New York City, NERA serves clients from more than 20 offices across North America, Europe, and Asia Pacific.