{"product_id":"fair-value-measurement-isbn-9781119191230","title":"Fair Value Measurement","description":"\u003cp\u003e\u003cb\u003eGet up to date on the latest FASB, SEC, and AICPA guidelines and best practices\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003ci\u003eFair Value Measurement\u003c\/i\u003e provides hands-on guidance and the latest best practices for measuring fair value in financial reporting. The Financial Accounting Standards Board (FASB), the U.S. Securities and Exchange Commission (SEC), and the American Institute of CPAs (AICPA) have all updated their guidelines for practitioners, and this book details the changes from a practical perspective. This new third edition includes a discussion on Private Company Council accounting alternatives for business combinations and impairment testing, with a detailed example of the Market Participant Acquisition Premium (MPAP), including European and Asian examples and expanded discussion of IFRS.\u003c\/p\u003e \u003cp\u003eFair value measurement guidelines continue to evolve, and this comprehensive reference provides a valuable, up-to-date resource for preparers, auditors, and valuation specialists.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eAdopt the best practices for implementing the FASB's Topic 820\u003c\/li\u003e \u003cli\u003eLearn the latest reporting requirements for fair value measurements\u003c\/li\u003e \u003cli\u003eUnderstand accounting alternatives for business combinations\u003c\/li\u003e \u003c\/ul\u003e \u003cul\u003e \u003cli\u003eExamine the details of MPAP in Europe and Asia\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eApplying fair value measurements to financial statements requires a move away from rules-based standards and toward application of professional judgment. This controversial shift has led to a reliance on valuation specialists, who face their own challenges in applying Topic 820 amidst an economic downturn and recovery, leading to an ever evolving set of best practices. Practitioners must stay up to date, and be aware of the changes as they occur. \u003ci\u003eFair Value Measurement\u003c\/i\u003e provides the most recent information and a practical approach to this area of financial reporting.\u003c\/p\u003e \u003cp\u003ePreface xiii\u003c\/p\u003e \u003cp\u003eAcknowledgments xix\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1: The History and Evolution of Fair Value Accounting 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhy the Trend Toward Fair Value Accounting? 2\u003c\/p\u003e \u003cp\u003eHistory and Evolution of Fair Value 5\u003c\/p\u003e \u003cp\u003eFair Value Accounting and the Economic Crisis 12\u003c\/p\u003e \u003cp\u003eThe FASB and IASB Convergence Project 17\u003c\/p\u003e \u003cp\u003eThe Future of Fair Value Measurement 23\u003c\/p\u003e \u003cp\u003eFair Value Quality Initiative for Valuation Specialists 24\u003c\/p\u003e \u003cp\u003eConclusion 26\u003c\/p\u003e \u003cp\u003eNotes 26\u003c\/p\u003e \u003cp\u003e\u003cb\u003eAppendix 1A: The Mandatory Performance Framework 31\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003ePerformance Requirements 31\u003c\/p\u003e \u003cp\u003eConclusion 33\u003c\/p\u003e \u003cp\u003eNotes 46\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2: Fair Value Measurement Standards and Concepts 47\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFASB ASC 820, \u003ci\u003eFair Value Measurement \u003c\/i\u003e48\u003c\/p\u003e \u003cp\u003eDisclosures 67\u003c\/p\u003e \u003cp\u003eFair Value Option 70\u003c\/p\u003e \u003cp\u003eStandards in the Valuation Profession and Fair Value Measurements 77\u003c\/p\u003e \u003cp\u003eConclusion 79\u003c\/p\u003e \u003cp\u003eNotes 80\u003c\/p\u003e \u003cp\u003e\u003cb\u003eAppendix 2A: Taxes and Fair Value Measurements 81\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eSummary of Changes under 2017 TCJA 81\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3: Business Combinations 85\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMergers and Acquisitions 86\u003c\/p\u003e \u003cp\u003eAccounting Standards for Business Combinations—A Brief History 88\u003c\/p\u003e \u003cp\u003eASC 805, \u003ci\u003eBusiness Combinations \u003c\/i\u003e90\u003c\/p\u003e \u003cp\u003eOther Business Combination Highlights 95\u003c\/p\u003e \u003cp\u003eSubsequent Accounting for Goodwill and Other Intangible Assets 99\u003c\/p\u003e \u003cp\u003eConclusion 100\u003c\/p\u003e \u003cp\u003eNotes 101\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4: The Nature of Goodwill and Intangible Assets 103\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eHistory of Intangible Assets 104\u003c\/p\u003e \u003cp\u003eIntellectual Property 105\u003c\/p\u003e \u003cp\u003eEconomic Basis of Intangible Assets 106\u003c\/p\u003e \u003cp\u003eIdentification of Intangible Assets 106\u003c\/p\u003e \u003cp\u003eUseful Life of an Intangible Asset 111\u003c\/p\u003e \u003cp\u003eIntangible Assets and Economic Risk 112\u003c\/p\u003e \u003cp\u003eGoodwill 112\u003c\/p\u003e \u003cp\u003eEconomic Balance Sheet 114\u003c\/p\u003e \u003cp\u003eConclusion 116\u003c\/p\u003e \u003cp\u003eNotes 117\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5: Impairment 119\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eEvolution of Impairment Testing 120\u003c\/p\u003e \u003cp\u003eApplicable FASB Guidance for Impairment Testing 122\u003c\/p\u003e \u003cp\u003eAccounting for the Impairment of Long-Lived Assets 123\u003c\/p\u003e \u003cp\u003eGoodwill Impairment Testing—Public Companies 125\u003c\/p\u003e \u003cp\u003eGoodwill Impairment—One-Step Impairment Loss 138\u003c\/p\u003e \u003cp\u003eTesting Other Indefinite-Lived Intangible Assets for Impairment 139\u003c\/p\u003e \u003cp\u003eAmortization of Goodwill 139\u003c\/p\u003e \u003cp\u003eConclusion 140\u003c\/p\u003e \u003cp\u003eNotes 140\u003c\/p\u003e \u003cp\u003e\u003cb\u003eAppendix 5A: Example of a Qualitative Impairment Analysis—PlanTrust, Inc. 143\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFinancial Accounting Standards Board ASC 350, \u003ci\u003eIntangibles—Goodwill and Other \u003c\/i\u003e143\u003c\/p\u003e \u003cp\u003ePlanTrust, Inc. 144\u003c\/p\u003e \u003cp\u003eNotes 159\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6: The Cost Approach 161\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Cost Approach under FASB ASC 820, \u003ci\u003eFair Value Measurement \u003c\/i\u003e162\u003c\/p\u003e \u003cp\u003eEconomic Foundation for the Cost Approach 164\u003c\/p\u003e \u003cp\u003eCost versus Price versus Fair Value 164\u003c\/p\u003e \u003cp\u003eThe Role of Expected Economic Benefits in the Cost Approach 166\u003c\/p\u003e \u003cp\u003eReproduction Cost versus Replacement Cost 167\u003c\/p\u003e \u003cp\u003eComponents of Cost 168\u003c\/p\u003e \u003cp\u003eObsolescence 169\u003c\/p\u003e \u003cp\u003eThe Relationships Among Cost, Obsolescence, and Value 170\u003c\/p\u003e \u003cp\u003ePhysical Deterioration 171\u003c\/p\u003e \u003cp\u003eFunctional (Technological) Obsolescence 172\u003c\/p\u003e \u003cp\u003eEconomic (External) Obsolescence 173\u003c\/p\u003e \u003cp\u003eApplying the Cost Approach 174\u003c\/p\u003e \u003cp\u003eTaxes Under the Cost Approach 178\u003c\/p\u003e \u003cp\u003eLimitations of the Cost Approach 179\u003c\/p\u003e \u003cp\u003eConclusion 179\u003c\/p\u003e \u003cp\u003eNotes 180\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7: The Market Approach 183\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eApplying the Market Approach When Measuring the Fair Value of an Entity or a Reporting Unit of an Entity 184\u003c\/p\u003e \u003cp\u003eConclusion 213\u003c\/p\u003e \u003cp\u003eNotes 213\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8: The Income Approach 215\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIntroduction 215\u003c\/p\u003e \u003cp\u003eDiscounted Cash Flow Method 216\u003c\/p\u003e \u003cp\u003eMultiperiod Excess Earnings Method 223\u003c\/p\u003e \u003cp\u003eFASB Concepts Statement 7 239\u003c\/p\u003e \u003cp\u003eRates of Return Under the Income Approach 244\u003c\/p\u003e \u003cp\u003eThe Income Increment\/Cost Decrement Method 245\u003c\/p\u003e \u003cp\u003eProfit Split Method 246\u003c\/p\u003e \u003cp\u003eBuild-Out, or Greenfield, Method 251\u003c\/p\u003e \u003cp\u003eWeighted Average Cost of Capital Calculation 251\u003c\/p\u003e \u003cp\u003eConclusion 258\u003c\/p\u003e \u003cp\u003eNotes 259\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9: Advanced Valuation Methods for Measuring the Fair Value of Intangible Assets 261\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIntroduction 261\u003c\/p\u003e \u003cp\u003eLimitations of Traditional Valuation Methods 261\u003c\/p\u003e \u003cp\u003eReal Options 263\u003c\/p\u003e \u003cp\u003eUsing Option Pricing Methodologies to Value Intangible Assets 266\u003c\/p\u003e \u003cp\u003eBlack-Scholes Option Pricing Model 269\u003c\/p\u003e \u003cp\u003eBinomial or Lattice Models 272\u003c\/p\u003e \u003cp\u003eMonte Carlo Simulation 277\u003c\/p\u003e \u003cp\u003eDecision Tree Analysis 280\u003c\/p\u003e \u003cp\u003eConclusion 281\u003c\/p\u003e \u003cp\u003eNotes 281\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10: Measuring the Remaining Useful Life of Intangible Assets in Financial Reporting 283\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFASB Guidance on Determining the Remaining Useful Life 283\u003c\/p\u003e \u003cp\u003eConsiderations in Measuring Useful Lives of Intangible Assets 285\u003c\/p\u003e \u003cp\u003ePractical Guidance for Estimating and Modeling the Useful Life 289\u003c\/p\u003e \u003cp\u003eConclusion 295\u003c\/p\u003e \u003cp\u003eNotes 295\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11: Fair Value Measurement for Alternative Investments 297\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIntroduction 297\u003c\/p\u003e \u003cp\u003eInvestments in Certain Entities That Calculated Net Asset Value per Share 299\u003c\/p\u003e \u003cp\u003eAICPA Technical Practice Aid 300\u003c\/p\u003e \u003cp\u003eAICPA Guidance for Determining the Fair Value of Investment 301\u003c\/p\u003e \u003cp\u003eAICPA Accounting and Valuation Guide, \u003ci\u003eValuation of Portfolio Company Investments of Venture Capital and Private Equity Funds and Other Investment Companies \u003c\/i\u003e305\u003c\/p\u003e \u003cp\u003eInternational Private Equity and Venture Capital Valuation Guidelines 306\u003c\/p\u003e \u003cp\u003eCommon Valuation Methodologies of Measuring the Fair Value of the Fund’s Investment Portfolio 307\u003c\/p\u003e \u003cp\u003eConclusion 308\u003c\/p\u003e \u003cp\u003eNotes 308\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12: Contingent Consideration 311\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eContingent Consideration: Earn-outs in Business Combinations 311\u003c\/p\u003e \u003cp\u003eAccounting for Contingent Consideration 312\u003c\/p\u003e \u003cp\u003eConclusion 324\u003c\/p\u003e \u003cp\u003eNotes 324\u003c\/p\u003e \u003cp\u003e\u003cb\u003eAppendix 12A: Measuring the Fair Value of a Nonfinancial Contingent Liability—Example of a Loan Guarantee 327\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Jordan Lee Fund Guarantee of Townsend Farm Development, LLC 328\u003c\/p\u003e \u003cp\u003eNotes 334\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13: Auditing Fair Value Measurement 335\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAuditing Standards 336\u003c\/p\u003e \u003cp\u003eThe Audit Process 338\u003c\/p\u003e \u003cp\u003eEvolution of Audit Standards for Fair Value Measurements and Disclosures 342\u003c\/p\u003e \u003cp\u003eAuditing Standard 2501, \u003ci\u003eAuditing Accounting Estimates, Including Fair Value Measurements \u003c\/i\u003e344\u003c\/p\u003e \u003cp\u003eAuditing Standards for Auditor’s Use of the Work of Specialists 349\u003c\/p\u003e \u003cp\u003eProposed International Standard on Quality Management 1 354\u003c\/p\u003e \u003cp\u003ePractical Guidance for Auditors 354\u003c\/p\u003e \u003cp\u003ePCAOB Staff Audit Practice Alert No. 9, \u003ci\u003eAssessing and Responding to Risk in the Current Economic Environment \u003c\/i\u003e356\u003c\/p\u003e \u003cp\u003eAICPA Nonauthoritative Guidance 358\u003c\/p\u003e \u003cp\u003eThe Appraisal Foundation 359\u003c\/p\u003e \u003cp\u003eConclusion 359\u003c\/p\u003e \u003cp\u003eNotes 360\u003c\/p\u003e \u003cp\u003e\u003cb\u003eAppendix 13A: Auditing Fair Value Measurement in a Business Combination 363\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAuditor Questions 363\u003c\/p\u003e \u003cp\u003eGeneral 363\u003c\/p\u003e \u003cp\u003eIncome Approach 364\u003c\/p\u003e \u003cp\u003eCost Approach 366\u003c\/p\u003e \u003cp\u003eMarket Approach—General 367\u003c\/p\u003e \u003cp\u003e\u003cb\u003eAppendix 13B: Auditing Fair Value Measurement in a Goodwill Impairment Test 369\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eGeneral 369\u003c\/p\u003e \u003cp\u003eIncome Approach 370\u003c\/p\u003e \u003cp\u003eWACC 371\u003c\/p\u003e \u003cp\u003eThe Market Approach 372\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14: Fair Value Measurement Case Study 373\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLearning Objectives 373\u003c\/p\u003e \u003cp\u003eBusiness Background and Facts—Dynamic Analytic Systems, Inc. 374\u003c\/p\u003e \u003cp\u003eNotes 406\u003c\/p\u003e \u003cp\u003e\u003cb\u003eAppendix 14A: Suggested Case Study Solutions 407\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eNote 437\u003c\/p\u003e \u003cp\u003e\u003cb\u003eAppendix 14B: Model Fair Value Measurements Curriculum 439\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAcknowledgments 439\u003c\/p\u003e \u003cp\u003eAICPA Staff 440\u003c\/p\u003e \u003cp\u003eAbout Us 440\u003c\/p\u003e \u003cp\u003ePreface 440\u003c\/p\u003e \u003cp\u003eModel Fair Value Measurement Curriculum 440\u003c\/p\u003e \u003cp\u003eAppendices and Examples 448\u003c\/p\u003e \u003cp\u003eNote 451\u003c\/p\u003e \u003cp\u003eGlossary of International Business Valuation Terms 453\u003c\/p\u003e \u003cp\u003eBibliography 463\u003c\/p\u003e \u003cp\u003eAbout the Author 475\u003c\/p\u003e \u003cp\u003eIndex 477\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eMARK L. ZYLA\u003c\/b\u003e is a Managing Director of Zyla Valuation Advisors, LLC. an Atlanta, Georgia based valuation and litigation consultancy firm. He is a Certified Public Accountant, Accredited in Business Valuation (CPA\/ABV), Certified in Financial Forensics (CFF) by the American Institute of Certified Public Accountants (AICPA), a Chartered Financial Analyst (CFA), and an Accredited Senior Appraiser with the American Society of Appraisers certified in Business Valuation (ASA). \u003c\/p\u003e\u003cp\u003eMark is the Chairman of the Standards Review Board of the International Valuation Standards Council (IVSC) and has served on the AICPA's Forensic and Valuation Services Executive Committee. Mark was inducted into the AICPA Business Valuation Hall of Fame in 2013.   \u003c\/p\u003e\u003cp\u003eFair value accounting has changed how financial information is reported. Fair value is now often used as a basis of measurement for reporting for financial and non-financial assets and liabilities. As the amount of financial statement information measured at fair value under U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) continues to increase, so does the need for experienced and knowledgeable valuation specialists and auditors. This new edition of \u003ci\u003eFair Value Measurement: Practical Guidance and Implementation\u003c\/i\u003e covers the history and evolution of fair value accounting, newly implemented accounting standards and best practices, fair value measurement standards and concepts, and more. \u003c\/p\u003e\u003cp\u003eThis fully revised and updated guide includes substantial new content and examples. In-depth chapters examine an inclusive range of important topics, while helping improve understanding of measuring fair value. The book begins by looking at the history and development of fair value accounting, current trends that affect fair value measurement, and how the once proposed convergence of U.S. GAAP with IFRS has influenced fair value concepts. An overview of fair value measurement in U.S. GAAP, including cross-references to FASB ASC 820, introduces important fair value framework concepts, Uniform Standards of Professional Appraisal Practice (USPAP) and International Valuation Standards (IVS). A chapter examining accounting standards for business combinations is followed by chapters on intangible assets, intellectual property, and testing goodwill for impairment under different accounting standards. \u003c\/p\u003e\u003cp\u003eVarious approaches to fair value measurement are explained in detail over the next several chapters. Hands-on examples demonstrate various methods and techniques for applying the cost approach to measure contributory assets, the market approach for measuring the fair value of certain intangible assets, and income approach methods used in business combinations. Subsequent chapters cover advanced valuation techniques, auditing fair value measurement, contingent consideration, and alternative investments. The closing chapter of the book provides a new case study illustrating the measurement of fair value for intangible assets, including a question and answer section that highlights important concepts. \u003c\/p\u003e\u003cp\u003eDespite some challenges, such as the potential for reporting bias, fair value measurement significantly increases public trust in financial reporting. The goal of \u003ci\u003eFair Value Measurement: Practical Guidance and Implementation\u003c\/i\u003e is to help overcome such challenges and assist valuation professionals to navigate the move towards fair value as the fundamental basis for accounting in the future. \t   \u003c\/p\u003e\u003cp\u003e\u003cb\u003eThe most recent developments and best practices for applying fair value measurement in financial reporting\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003eThe Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have brought fair value measurements in financial reporting together through the issuance of parallel statements. This move away from traditional measurements under accounting standards requires a degree of professional judgment, often provided by an outside valuation specialist. Financial executives, valuation specialists, and auditors need to be aware of the latest requirements for applying fair value measurement to financial statements. \u003c\/p\u003e\u003cp\u003eThe \u003ci\u003eThird Edition\u003c\/i\u003e of \u003ci\u003eFair Value Measurement\u003c\/i\u003e brings together best practice accounting and valuation guidance on relevant FASB Accounting Standards Codification (ASC) standards, such as ASC 820, \u003ci\u003eFair Value Measurements\u003c\/i\u003e. This fully updated edition offers new and revised coverage of Private Company Council (PCC) accounting alternatives for business combinations and impairment testing, the latest on testing for impairment of goodwill for public entities, the application of the Market Participant Acquisition Premium (MPAP), fair value measurement of portfolio investments, and expanded discussion of fair value measurements under International Financial Reporting Standards (IFRS).\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47989195079909,"sku":"NP9781119191230","price":95.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781119191230.jpg?v=1761783163","url":"https:\/\/k12savings.com\/es\/products\/fair-value-measurement-isbn-9781119191230","provider":"K12savings","version":"1.0","type":"link"}