Goodwill and Intangible Asset Impairment: A 2014 Perspective
Overview:In a two hour live webcast, a panel of thought leaders and practitioners assembled by The Knowledge Group will discuss the significant and latest issues with respect to goodwill and intangible impairment.
Key topics include:
- Goodwill and intangible asset impairment: an overview
- Latest issues and its implications
- Significant implications and impacts
- Compliance and best practices
- Latest regulatory updates
Stephen W. Shulman CPA/ABV, CVA, Partner
Anchin, Block & Anchin LLP
Overview of where we have been, where we are and where we are going
- Understand the relationship between ASC 805 (Business Combinations), ASC 350 (Indefinite Life Intangibles & Goodwill), ASC 360 (PP&E & Finite Life Intangibles)
- Private Company Council (PCC)
- PCC Issue 13-01A
- Accounting for Identifiable Intangible Assets in a Business Combination
- PCC Issue 13-01B
- Accounting for Goodwill Subsequent to a Business Combination
- Issues under discussion by FASB- the Four Views being analyzed
- PCC model
- Amortize Goodwill over expected useful life
- Direct write off
- Simplified impairment test without amortization
- Impairment Deficiencies identified by the PCAOB
- U. S. GAAP & IFRS Differences
- Clashes and minimizing Global Discrepancies
- Impairment Cases in Financial News
Curt Germany, Jr., Director
CBIZ Valuation Group, LLC
Triggering Events to Qualitative Analysis
- At what level of the organization is impairment tested
- Operating Unit
- Operating Segment
- One level below an operating segment
- Entity when appropriate
- Operating Unit
- When to Test for Goodwill and Indefinite Life Intangible Impairment annually or during the fiscal year
- “Triggering events” for interim testing- facts and circumstances
- May trigger impairment
- Same as the facts and circumstances outlined in Step Zero
- Step Zero – Qualitative Goodwill Impairment Test (ASU 2011-08)
- Objective – reduce complexity of performing Step One of the Goodwill Impairment Test (may bypass and perform Step One)
- Must result in an assessment that is “more likely than not” (>50%) that a reporting unit’s fair value is less than its carrying value to be impaired
- Examples of Events and circumstances that may indicate Goodwill impairment
- General macroeconomic conditions
- Industry and market considerations
- Cost factors
- Decline in financial performance
- Entity-specific events
- Events affecting a reporting unit
- Sustained decrease in share price
- Qualitative factors not intended to be stand alone tests
- Positive mitigating factors can be included
- “Triggering events” for interim testing- facts and circumstances
Nancy Czaplinski, Senior Managing Director
Carlo Carpino, Managing Director
Testing for Subsequent Impairment of Fair Value
- Step One – Quantitative Goodwill Impairment Test
- Determine Fair Value of Reporting Unit (ASU 2010-08)
- Compare Fair Value of Reporting Unit to Carrying Value
- Impairment indicated if Carrying Value exceeds Fair Value
- Perform Step Two
- Step Two – Recognition and Measurement of an Impairment Loss
- Order of Testing
- Test long-lived tangible and intangible assets subject to amortization first under ASC 360, if impairment is indicated (Triggering Events)
- Record any impairment, then perform impairment testing under ASC 350
- Goodwill is tested last
- Prospective Information used in Quantitative Test
- Approaches to value (including asst vs stock differences)
- Customer base valuation and additional valuation support requirements
- Relief from Royalty approach for intangibles
Jim Asher, Chief Operating Officer
A internal corporate, European and UK perspective
- The internal corporate perspective
- UK European- IFRS perspective
- Opportunities to identify new intangibles
Who Should Attend:
- Attorneys and Consultants for Financial Companies
- Financial Executives
- Valuation Analysts
- Other Related/Interested Professionals
Stephen Shulman, CPA/ABV, CFF and CVA is the Co-Practice Leader of Anchin, Block and Anchin’s Litigation, Forensic, & Valuation Services Group and its Business Risk Services Group. Stephen provides valuation services to businesses that include ASC 350 and 360 – goodwill, intangible and long-lived asset impairment analysis, ASC-805- purchase price allocations, ASC 820- fair value measurements for financial statements, and ASC 718- valuing equity compensation. Stephen has been qualified as an expert in the Supreme Court of New York and Federal Courts. He has provided damage calculations requiring fair value and fair market value standard of value in oppressed shareholder matters, lost value and matrimonial matters. He also performs valuations for tax purposes. Stephen has presented on different issues to the attorneys in the office of the NYS Attorney General, NYC Corporate Counsel, the local chapters of the NYS Bar Association and other professional groups.
Stephen Shulman, CPA/ABV, CFF and CVA is the Co-Practice Leader of Anchin, Block and Anchin’s Litigation, Forensic, & Valuation Services …
Mr. Germany is a director in the Southwest region of CBIZ Valuation Group. He specializes in the valuation of businesses, business interests, and intangible assets across a wide range of industries. Mr. Germany has more than 15 years of experience as a business valuation professional, investment banker and entrepreneur. He has led valuation engagements for hundreds of companies and his work has been relied upon for financial reporting, estate and gift taxation, litigation, and transaction support purposes.
Mr. Germany comes to CBIZ Valuation Group from Waterview Advisors, where he was Director of Valuation Services. Prior to Waterview, Mr. Germany was part of an investment group that acquired a regional wholesale distribution business in 2005. He was actively involved in overseeing the acquisition process and growth strategy. Mr. Germany remained involved at a board level until the business was sold in 2011.
Mr. Germany’s investment banking career began in 1997 with Citi Capital Strategies, the middle market M&A division of Citigroup and Smith Barney, before he joined the healthcare investment banking team at SWS Securities, Inc. His cumulative investment banking experience comprises more than $500 million in middle market mergers and acquisitions transactions, public and private equity offerings, and debt placements.
Mr. Germany holds a Bachelor of Business Administration concentrating in finance from The University of Texas at Austin, McCombs School of Business and a Master of Business Administration from Southern Methodist University, Edwin L. Cox School of Business. He also holds the Certified Valuation Analyst (CVA) designation from the National Association of Certified Valuation Analysts.
Mr. Germany is a director in the Southwest region of CBIZ Valuation Group. He specializes in the valuation of businesses, …
Nancy is a senior managing director of American Appraisal’s financial valuation practice and national director of its solvency and fairness opinion practice. She has provided solvency and fairness opinions to clients in numerous industries and financial analyses and business, intangible asset, and liability valuations for private and public companies for various purposes including acquisitions, bankruptcy and restructuring, tax restructuring, and exchanges and mergers. She has also provided valuations of interests in privately held companies including partnerships, S corporations and limited liability companies.
Nancy has presented testimony as an expert witness for the Court of Chancery with the State of Delaware, the US Bankruptcy Court for the Eastern District of Wisconsin, and the US Tax Court. Her experience includes income tax and financial reporting audits, depositions on valuation matters, and assisting clients in negotiations pursuant to closely held valuation litigation issues.
Nancy is a senior managing director of American Appraisal’s financial valuation practice and national director of its solvency and fairness …
Carlo is a director for American Appraisal’s financial valuation practice. He has performed numerous valuations of public and private businesses; intangible assets such as patents, unpatented technology, contracts, licenses, copyrights, computer software, franchises, noncompetition agreements and customer relationships; and financial assets such as inventory. He has completed appraisals for purposes including purchase price allocations, goodwill and asset impairment, mergers and acquisitions, divestitures, financing, strategic planning, management planning, shareholder buy/sell agreements, corporate restructuring, dispute resolution, federal and multinational corporate tax planning, estate and gift taxation, accounting and tax reporting, litigation support, and bankruptcy. Much of his work has been for financial reporting purposes; he also has performed tax-related assignments in connection with the valuation of closely held securities and in accordance with guidance provided in IRC § 482, IRC § 382, IRC § 1060 and IRC § 409A.
Carlo is a director for American Appraisal’s financial valuation practice. He has performed numerous valuations of public and private businesses; …
Jim is the founder, COO, and leads the IP valuation practice of Coller IP. He has over 14 years’ experience of valuation of many intangible asset classes in businesses ranging from start-ups to multi-nationals and across many sectors.
A physicist by background, Jim has worked for over 30 years in technology development, transfer and commercialisation in physical sciences and engineering, healthcare and software sectors.
Jim has led hundreds of valuations for companies, investors, for M&A and restructuring, tax and insolvency purposes, impairment reviews, asset financing and due diligence. These range from indicative valuations for management purposes, through to formal independent opinions subject to tax authority/regulator scrutiny, and as an expert witness in litigation.
Jim is the founder, COO, and leads the IP valuation practice of Coller IP. He has over 14 years’ experience …
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About Anchin, Block & Anchin LLP
Anchin, Block & Anchin LLP is recognized as a top-tier firm of accountants and consultants nationwide and in the metropolitan New York City area in terms of its size, management, scope of services and work environment. With a staff of approximately 350 and numerous specialized industry and service teams, Anchin provides privately-held and publicly held businesses and high-net-worth individuals with a wide range of traditional attestation and tax services along with non-traditional services including valuation services, litigation support, forensic accounting, merger and acquisition services, wealth management, economic development and tax incentives, and management and succession advisory services.
About CBIZ Valuation Group, LLC
CBIZ Valuation Group is a premier, national valuation firm specializing business, tangible and intangible asset valuation, financial advisory and litigation support. We are known for our comprehensive services (financial, real estate, and machinery and equipment), industry expertise (including consumer products, financial services, healthcare, life science, manufacturing, retail, high technology and telecommunications), and professionalism. We offer the utmost level of technical proficiency and maintain the highest valuation standards, making us the choice for independent valuation services.
About American Appraisal
American Appraisal is an independent global firm providing valuation and related advisory services for business, financial, legal or tax purposes. With a staff comprising 900 employees operating from 24 offices throughout the Americas, Asia-Pacific, Europe and the Middle East, American Appraisal delivers accurate, reliable valuations for financial and tax reporting, fixed asset and risk management, consulting and compliance. American Appraisal’s valuation expertise encompasses all classifications of tangible and intangible assets, and its objective reports withstand scrutiny from regulatory, judicial and taxing authorities.
About Coller IP
Coller IP, based in UK near Oxford and in London, specialises in the commercial management of intangible assets for an international client base (www.collerip.com). Coller IP understands that realising value from intellectual property and wider intangible assets is vital to business, and has a vision that IP assets will become fully tradable. The Coller IP in-house team, patent and trade mark attorneys, IP strategists and analysts, valuation consultants and brokers, delivers an integrated commercial service to unlock the potential of IP for its clients.