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Asset/Liability Valuation Overview
The valuation of unique assets and contingent liabilities is vital in today's environment. We have seen the percentage of overall firm value (market equity) represented on the balance sheet (tangible assets) decline to its lowest level ever (down from 95% in 1978 to only 28% in the late 90's). This shift from hard assets to intangibles - such as intellectual property, patents, etc. - has led to an increased demand on investors and firms to develop methods for assigning "real" values to these items, in the hope of determining overall firm value.
In addition to the shift in the asset base of many firms, there are an increasing number of regulations, such as FAS 123r and IRS Code Section 409A, focused on stemming the use of deceptive deferred compensation plans - e.g. the granting of in-the-money stock options. Failure to comply with this new form of Sarbanes-Oxley related regulations can lead to tremendous tax liability, SEC involvement, and ultimately, investor backlash.
Our team of academicians is experienced, with over 40 Fortune 100 and 500 clients, in valuing various forms of intangible assets (FAS 142 and 141), in addition to various forms of deferred compensation (FAS 123r and IRS Code Section 409). We provide our clients with cutting-edge, customs solutions, ensuring that they will always be on the theoretical horizon, without sacrificing complete transparency and compliancy.
