FASB 141, 142 and 144

Enterprise Appraisal Company’s team of valuation experts allows our clients to follow the procedural standards instituted by Statements 141, 142 and 144, promulgated by the Financial Accounting Standards Board (FASB) with the intent to provide investors with case-specific, precision financial reporting.

The purpose of SFAS 141 is to provide comprehensive financial information to the acquiring or acquired entity. SFAS 141 provides a more exact financial profile by recognizing and allocating all balance sheet items in an acquisition. This was accomplished by abandoning the pooling of assets method in favor of the direct relevant purchase method.

SFAS 142 requires the annual testing of the residual goodwill value reported, and if impaired, a write down is required. If the Phase 1 test indicates impairment, a determination of the Fair Value (FASB 157) of all assets, including other intangible assets, of the reporting entity is required to determine the extent of the write down required. Enterprise Appraisal Company’s expertise will provide this in a concise, defensible valuation report.

Similar to SFAS 144, SFAS 144 applies to the impairment of long-lived assets. The sum of undiscounted cash flows relating to the assets is compared to the book value of the asset. If that sum is greater than the book value, there is no impairment. If it is less than the book value, a Fair Value determination must be made.

For a complete description of FASB 141, FASB 142 and FASB 144, please click on the imbedded link.