August 2007 Articles
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Poisoning the Well
Yesterday I received an email from a client with whom we enjoyed working in 2006. (In point of fact, we enjoy working with all our clients, and at least in part that’s why we love our jobs so much.) Apparently it was time to get a fresh valuation. Occasionally I...
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Dual Purpose is de rigueur
Occasionally, we get asked to opine on the state of our industry and prevailing best practices. We’re in a fairly good position to speak to the issues, being at the crossroads of compliance as we are. For while our clients are a self-selecting group, purposefully offloading 409A-related risk, we have...
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Public Equities and Fair Value
A good friend of mine is an analyst at a large, well-regarded hedge fund. We fell into conversation about the New Dial, and how valuation specifically relating to SFAS 157 is influencing the way publicly traded companies are reporting earnings. My friend subscribes in part to the investment philosophy of...
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The New Dial
Jonathan Weil of Bloomberg wrote today about the implications of Fair Value accounting under SFAS 157, and the possibly misleading results that can be reported under this new standard. It’s a quick read about Wells Fargo’s quarterly earnings statement, well worth your time. In the article, Mr. Weil writes, “Here’s...
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Hey, this price is too low!
We issued a Gold Standard (dual-purpose) valuation report recently to a management team that we really like to work with, and got back a bit of a surprise. “Hey,” they said, “this option price is lower than the last report you issued. We’ve made progress – what gives?” Actually, this...
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A Gem from the AITF Top 25
Noting the absence of authoritative guidance relating to Fair Value accounting, the Appraisal Issues Task Force (AITF) paper from February 2006 highlights a significant issue: a valuation specialist and a financial auditor “may disagree on the appropriate approach to value an asset.” Naturally. However, as the AITF paper points out,...
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AITF Issues Futile Wish List
My partner Alex Hodgkin just returned from the quarterly meeting of The Appraisal Issues Task Force in Chicago. In case you haven’t heard (I hadn’t either), the AITF issued a paper in February 2006 that listed their Top 25 issues they have with FASB’s position on Fair Value for Financial...
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