Our services leverage decades of experience and our valuations professionals approach each mandate with an appreciation of its unique requirements and challenges.
We advise high-net-worth individuals, public and private companies, equity and debt investors, transaction advisors, compliance and regulatory agencies, and state and federal courts.
We have performed valuations of assets and business interests throughout the Americas, Europe, Middle East and Africa, and Asia/Pacific.
As current and former members of regulatory and standard-setting organizations, our valuation professionals understand the expectations of our clients. We perform our valuations through the careful assessment of numerous quantitative and qualitative factors. Our reports are rigorously peer-reviewed by senior-level valuers who confirm the validity of the assumptions and the data before approving the deliverables.
Our team delivers your report to you on time and can provide additional consultation and advisory services. We assure that communications, process execution, and quality control are properly managed. Our team is available to provide valuable insights and perspectives into your valuation to help you get behind the numbers and make better business decisions.
Our independent valuation opinions comply with American Institute of Certified Public Accountants’ guidelines. Chief Financial Officers, Chief Accounting Officers, Corporate Controllers, and Corporate Boards rely on our experienced valuation professionals to produce complex, sophisticated, and timely valuations to help them comply with domestic and international reporting requirements.
Whether performing an annual goodwill impairment test or estimating the fair value of acquired intangible assets arising from a recent acquisition, we help companies satisfy financial reporting requirements in a timely and cost-efficient manner.
- Business combinations (Topic 805/IFRS 3)
- FON Valuation Services professionals have a 360-view of the financial reporting obligations companies must meet pursuant to business combinations. Having been involved in the development and refinements of ASC 805, Business Combinations and IFRS 3 Business Combinations, we understand the intentions of standard setters and expectations of regulators in promulgating the underlying standards. Experience gained from guiding companies through hundreds of transactions for strategic and financial buyers, from simple M&A to complex, cross-border deals, our team understands the nuances from the application of these mostly converged standards, as well as the thoroughness of the analyses expected by clients, and the accuracy and completeness of the work products and supporting documents expected by auditors and regulators.
Our team stands ready to assist you with the allocation of the purchase price under U.S. GAAP or IFRS, and related analyses, including:
- Pre-acquisition, pro forma allocations for filings with the SEC and other regulators, as well as to facilitate accretion/ dilution analysis.
- Tax reporting requirements (e.g., IRC §1060) to allocate purchase price and acquired assets and liabilities to legal entities; and
- Valuations of contingent consideration, deferred revenue, and other contractual liabilities that are typical features of complex transactions.
- Goodwill and indefinite-lived intangible assets (Topic 350/IAS 36)
- Analysis of long-lived assets (Topic 360/IAS 36)
- Share-based compensation (Topic 718/IFRS 2)
- Fresh start accounting (Topic 852)
- Upon emergence from Chapter 11 of the U.S. Bankruptcy Code, a company is given a “fresh-start,” whereby its balance sheet is restated to fair value, which may include recording assets and liabilities not previously recognized. The accounting treatment, set forth in ASC 852, Reorganizations, is akin to the treatment normally required in the accounting for business combinations. In essence, fresh-start reporting adheres to the accounting principle that recognizes the change in control of the company as it completes the court confirmation process.
The restated balance sheet plays an important role in a company’s process to emerge from bankruptcy, as it becomes a part of documents included with the disclosure statement (prospective financial information and forma balance sheet) that the interested parties will consider, along with the plan of reorganization, and must approve before the court will confirm it. The restated balance sheet also provides investors, creditors, analysts, regulators, auditors, and capital market participants with information to better gauge the financial condition of the newly emerged company and/or the value of their present or prospective investment in it. Considering the number of potential users and the level of reliance placed by the users on the financial statements of an emerging company, it is important that the valuation of the assets and liabilities is completed based on solid valuation theory, well supported facts, and a reasonable set of assumptions.
FON Valuation Services professionals have provided Fresh-Start Accounting and related services to numerous companies. We are well-versed in navigating the complex emergence process, including estimation of reorganization value (akin to purchase price); allocation of reorganization value and goodwill across multiple reporting units for financial reporting and tax purposes; as well as preparation of liquidation and fraudulent conveyance analyses.
FON has the broad technical experience to handle the following complex tax matters:
- Estate and gift tax valuations
- S corporation conversions
- Section 409A valuations
- Internal Revenue Code Section 409A requires a business valuation for stock options, stock appreciation rights, and other forms of deferred compensation. Stock options issued below fair market value (FMV) can result in adverse tax and accounting consequences. Companies should perform a 409A business valuation at least annually. If the company experiences a significant event, such as a new round of financing, or if the company is approaching a significant value creation event, such as an IPO, more frequent valuations may be required.
The valuation of common stock also is used for GAAP financial reporting purposes. ASC 718 requires companies to record the expense associated with share-based compensation, which necessitates a business valuation. The annual business valuation is a valuable strategic planning tool that allows management to track changes in the company’s value drivers.
- Cost segregation services
- Cost segregation studies offer the opportunity to maximize tax depreciation benefits on new construction, acquisitions of real property, and renovations of existing owned or leased facilities. The depreciation is generally determined using Modified Accelerated Cost Recovery System (“MACRS”) under Section 168. Under current law, any addition or improvement to commercial property is depreciated over a 27.5 or 39-year recovery period using the straight-line method. If the addition or improvement can be categorized as Section 1245 Property (tangible personal property) or site improvements, MACRS allows a much shorter recovery period (usually five or seven years for personal property and 15 years for site improvements) using an accelerated method.
The classification of the property components considered to be Section 1250 Property and Section 1245 Property is based on our understanding of their definitions as set forth in the applicable Internal Revenue Code Sections, Regulations, and case-law precedents. Proper classification of real property into Section 1245 and Section 1250 assets can result in significant net after-tax savings. We would be pleased to further discuss these potential tax savings and can provide preliminary estimates of the present value of the tax savings as we learn more about your real estate.
- Transfer Pricing
- Transfer pricing services support financial and tax reporting decision making and compliance, whether for legal entity restructuring transactions, related party sales of intangible assets, deemed outbound intangible asset transfers, M&A and purchase price allocations under Treasury Regulation §338, and Net Operating Loss limitations. We support multinational firms and their advisors through management and implementation, controversy support, and planning & design services, using expertise from our alliance partners, and operating experience in 55 countries worldwide.
The Organization for Economic Cooperation and Development (OECD) Article 9, describing the arm’s length principle is the standard used by most countries in cross-border tax issues. The arm’s length principle refers to the price paid between related parties as within an arm’s length of pricing that would have been paid between unrelated parties, under the same or similar circumstances. Differences can and do occur between countries and their tax authorities following the OECD guidelines, requiring both local and global perspectives through their implementation, support, and compliance phases of tax planning.
Whether publicly traded or privately owned firm, US multinational or foreign firm, we can assist regarding global tax and holding company structures, planning and treaty analysis, cross-border mergers & acquisitions, US investments and reporting, earnings and profits, and foreign tax credit utilization services.
- Real estate
- Our real estate teams value commercial and industrial real estate, including retail, office, healthcare, hospitality, multi-family housing, special purpose manufacturing and infrastructure properties. Our services include valuations of single property and global portfolios, for financial reporting and tax compliance, purchase/sale, lease analysis, property tax appeals, and litigation support. Our valuers are members of the Appraisal Institute, The Royal Institution of Chartered Surveyors, and country specific valuation organizations. We have the resources to assist client needs worldwide, while complying with local real estate licensing and valuation practices.
- Machinery & equipment
- The machinery & equipment specialists of FON are credentialed globally and are frequent authors and speakers on the valuation of complex manufacturing facilities. Our services include financial reporting and tax compliance, fixed asset management, insurance, leasing, componentization studies, and litigation support. They serve on committees ranging from the American Society of Appraisers to the Royal Institution of Chartered Surveyors. Our industry expertise includes aerospace, food and beverage, metals, and mining, manufacturing, pharmaceutical, power generation, technology, and telecommunications.
The structures of equity incentive plans vary widely, from formal employee stock ownership plans (ESOPs) to phantom stock plans. We have extensive experience performing business valuations for a variety of equity incentive plans and are uniquely positioned to serve as an integrated provider of ESOP services through every stage of the plan life cycle. Typical engagements include:
- Pre-ESOP planning (strategic alternatives, feasibility studies, preliminary valuations)
- ESOP formation (transaction structuring and negotiating, initial valuations, fairness and solvency opinions)
- ERISA Compliance (annual valuations, loan restructurings, trustee advisory, litigation support and testimony)
- Exit (merger & acquisition advisory, recapitalizations, ESOP terminations, fairness opinions)
FON Valuation Services provides detailed expert reports, reviews, and critiques, opposing expert reports, consultations with legal counsel, other expert reports regarding deposition and trial preparation, and expert witness testimony. Because of our experience and high-quality reports, attorneys and judges feel comfortable relying on our opinions when making critical decisions in difficult litigation matters. Our valuation dispute services are primarily, but not exclusively, used for:
- Fraudulent conveyance
- Bankruptcy (reorganization and liquidation)
- Financial opinions (fairness and solvency)
- Mergers and acquisitions
- Collateral valuation
- Intellectual property disputes
- Shareholder disputes
- Tax disputes
- Family law matters
- Cram-down situations
- Lost profits
- UCC sales
- Other commercial disputes
- Buy/sell agreements
We provide objective and unbiased fairness, solvency, and capital adequacy opinions to boards of directors, special committees, trustees, investors, and other fiduciaries to facilitate informed decisions. We also provide opinions on fair value for investments not regularly traded in public markets or otherwise illiquid.
We leverage our considerable experience to assist clients in making sound, reliable decisions in completing their complex transactions. Our independent advice withstands scrutiny from shareholders, bondholders, various regulatory agencies, and other counterparties to a transaction.
These opinions facilitate informed decisions in connection with:
- Mergers & acquisitions
- Related-party transactions
- Dividend recapitalizations
- Corporate divestitures
- Debt & equity financings
Our combined valuation and M&A expertise allows us to provide niche transaction advisory services On behalf of buy-side clients, our team performs valuation due diligence to assess the value of acquisition targets and formulate the valuation terms in letters of intent. In addition, we use our technical expertise and experience to develop tailored business and forecasting models for our clients.