News & Views
With the shortened holiday week, and with many of you likely taking your last summer vacation of the year, I'll keep this brief. Here are a few reminders from ASA:
- USPAP. As Linda Trugman, our ASA Business Valuation Committee Chair, reminded us in last week's issue, the second exposure draft of the 2014-2015 version of USPAP is available. Comments are due on or before October 5, 2012, so please review and get your comments in before the deadline.
- Fall ASA Education and Conferences. As you are planning your fall schedule, don't forget ASA's upcoming educational offering. Upcoming educational opportunities are to the left of this column, with links to registration. Don't forget about the upcoming joint 2012 International Appraisers and Advanced Business Valuation Conferences in Phoenix, Arizona. The conference will be at the Arizona Biltmore and rates there are only guaranteed until this coming Friday September 7th.
For those of you who practice in the financial reporting arena and want some fun reading to cap off your summer, in August the American Institute of CPAs' (AICPA) Financial Reporting Executive Committee (FinREC) issued a working draft of a new chapter of the AICPA Accounting and Valuation Guide Valuation of Privately Held Company Equity Securities Issued as Compensation (the Guide). The new chapter is titled Inferring Value From Transactions in a Private Company’s Securities and will become Chapter 8 of the Guide. This new chapter discusses how to evaluate private transactions, as well as secondary market transactions, and their usefulness or relevance for estimating fair value of the company's other securities (such as preferred stock, common equity, etc.). FinREC also released the latest working draft of the Guide.
Even if your practice is not involved in the financial reporting practice area, the new chapter provides a good template for evaluating prior security transactions for any appraisal assignment. Reviewing its content may help you develop a more disciplined approach to evaluating these transactions and why they should or should not be considered in the appraisal assignment at hand. It also includes some interesting data in graphical form on long-term IPO and secondary market transaction trends.
Hope you all enjoy you abbreviated work week!
Arlene Ashcraft, ASA, CFA
Columbia Financial Advisors, Inc.