The Great Wealth Transfer: Why Valuation Matters More Than Ever By Federal Appraisal LLC As America enters what many demographers and financial advisors are calling the “Great Wealth Transfer,” family-owned businesses and real estate holdings are facing one of the most significant transitions in their history. Estimates suggest that tens of trillions of dollars in…

Impairment Studies UPDATE LINK Impairment issues have always been important in periods of economic contraction and decline. They have recently become more important, due to the general economic condition and the recent changes to accounting procedures. In late June 2001, the FASB issued Statements No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets, substantially changed the accounting for business combinations, goodwill, and intangible assets. The new procedures may now require a separate analysis of various tangible and intangible assets and may require a valuation of tangible and intangible assets to determine the impairment for the purpose of adjusting the booked values of assets. Impairment studies are complex appraisal and consulting issues because of the need to analyze several levels of value. The impaired assets may include significant business value, and other intangibles. The overall asset value as well as the value of components of the overall asset must be determined. Furthermore, the values must be reconciled. Federal Appraisal provides expert impairment studies in compliance with the latest accounting procedures. Federal Appraisal, LLC provides cost effective, USPAP-compliant impairment studies that are certified by MAI’s and ASA’s. See Business Valuation/Asset Type for more.

Mark to Market Mark to Market Appraisal Services Federal Appraisal, LLC provides “Mark to Market” Appraisal Services as required by the Government Accounting Standards Board (“GASB”) new rule, Statement 52. The rule requires state and local government endowment funds that hold land and other real estate as investments to report the asset or liability at fair value. When real estate is marked to market, for accounting purposes it is assigned the value that it would fetch in the open market. Currently, governments report such assets and liabilities at historical cost. The rule, Statement 52, was issued on November 21, 2007 and is effective for financial-statement periods beginning after June 15, 2008. The mandate mostly affects public colleges and universities, as well as other entities that carry land and other real property as part of their endowment investments. By reporting the endowed real estate at historical cost, governments provide investment results only in the year the holdings are sold. By using the fair-value or mark to market method, governments provide “more decision-useful information about their composition, current value, and recent changes in value,” noted the GASB in a press statement. The rule mandates that governments report changes in fair value as investment income and requires them to disclose the methods and significant assumptions used to determine that market value. Also, governments must provide investors with information about other investments booked at fair value. The “Mark to Market” Appraisal Services that Federal Appraisal, LLC provides comply with all GASB appraisal and accounting reporting requirements, as well as with the Uniform Standards of Professional Appraisal Practice (USPAP), the Appraisal Institute and the American Society of Appraisers.

Purchase Price Allocation Purchase Price Allocation Federal Appraisal, LLC provides full reports and management support when allocating a purchase price among the various assets included in a multi-asset or portfolio acquisition or disposition. A purchase price allocation is based on the value of the various assets. As appraisal experts serving a large geographic area where a portfolio of assets is more likely to occur, and as appraisal experts on special and complex assets where various classes of assets are more likely to have significant value, Federal Appraisal, LLC is uniquely qualified to serve. Special considerations in our purchase price allocation include: financial, tangible, intangible assets individual economic entities individual properties property, plant and equipment goodwill and customer relationships in-process research and development current or existing technologies and products patents, trademarks and trade names developed software and databases assembled workforce (workforce in place) SEC and IRS requirements See Business Valuation/Asset Type for more.