ASC 820

General Background

A major limitation with the accounting/reporting on financial statements is that the requirements are based upon the historical value of the assets/liabilities at the time of their acquisition. This accounting/reporting standard has created a set of balance sheets that no longer indicate the true economic value – the Fair Value.

To rectify this limitation, Accounting Standards Codification Topic 820 ("ASC 820") is a financial reporting standard that provides guidance on how to measure and disclose the fair value of assets and liabilities for financial reporting purposes and disclosures.

Who Needs to Address ASC 820?

Basically, any entity that prepares financial statements in accordance with General Accepted Accounting Principles ("GAAP") in the US is required to comply with ASC 820 when measuring and disclosing the fair value of its financial assets and liabilities. This includes public and private companies, non-profit organizations, and government entities.

Who is Responsible for the Implementation/Calculations /Disclosures?

It is not the responsibility of the auditor to prepare the ASC 820. The preparation of the ASC 820 by the auditors presents a conflict of interest. Despite the complexities, it is the responsibility of the management to ensure that the financial statements are prepared in accordance with GAAP and that the disclosures related to ASC 820 are accurate and complete. The auditor should review the fair value measurements and related disclosures to determine whether they are consistent with the requirements of ASC 820 and assess whether they are reasonable in relation to the financial statements taken as a whole.

Our Value Added

The complexity of these reporting/disclosure requirements necessitates an independent, accredited team that fully understands these intricate reporting/disclosure requisites.

We do not perform attestation functions – our business is on valuations. Our team consists of approximately 20 professional business valuators with the resources to address ASC 820, including, but not limited to, Intellectual Properties and other Intangible Assets. These resources include Patent Attorneys, Accredited Business Valuators, and Accredited Senior Appraisers.