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January 25, 2018 |   NACVA  |   CTI  |     |

Lease Accounting 2018 Update Overview—Putting it on the Balance Sheet In February 2016, the FASB issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842).  The existing standard has been criticized because its bright line classification criteria enabled entities to structure leases in such a way as to avoid putting them on the balance sheet.  The new standard aims to improve and simplify the financial reporting for leases and create a model that provides for faithful representation of leasing transactions for both lessees and lessors.  This article summarizes the change. Read more»

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An Analysis of Discount For Lack of Marketability Models and Studies: Calculating Discounts Accurately Depends a Lot on Company Specifics. Here’s What You Need to Know Dennis Bingham and KC Conrad provide a thorough look at options for calculating a discount for lack of marketability (DLOM), including restricted stock studies, pre-IPO studies, theoretical and option pricing models, discounted cash flow (DCF), Mandelbaum factors, and more. Read more»

Developing Supportable Attrition Rates in Customer Relationship Valuations: Valuation of the Customer Base The value of the customer base is a function of attribution. Measuring percentage attribution requires access to internal data, and this data is often missing. Where it is available, the valuation professional can use the Constant Revenue or Revenue Decline Model. This article explains how these models are developed. Read more»

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Lessons to Learn from SEC Accounting and Auditing Enforcements SEC Should Define “Advisor,” Says CFA Institute This Time-Saving Trick Gets Advisors Fired.  Don’t do it.