Common Stock (123R & 409A) Articles
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Valuation Updates: When and How
Yesterday we participated in a Fair Value forum with our friends and colleagues at Frank Rimerman, Grant Thornton, Trenwith, Cogent, FSCG and Perisho Tombor. Among other issues, we discussed the common concerns of our clients relating to 409A/123R valuation practices. Our primary concern was how best to educate our clients...
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Cooley explains the 409A compliance delay
Law firm Cooley Godward Kronish released a short article tonight that explains the "transition relief" offered by the IRS with respect to 409A compliance. It is a reminder how much of 409A is outside the realm of valuation. In fact, darn near all of it. I was surprised when a...
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This just about sums it up
There's plenty of confusion out there. But it's starting to get easier as the various constituencies are absorbing industry best practices. It used to take me all of an hour to describe how the industry has been turned on its head by Fair Value accounting, and (more importantly) what to...
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Auctioning Options
David Reilly appeared on C2 of the WSJ today with an article on the SEC's final clearance for Zions Bancorp to use an auction process to value employee stock options. It's a novel approach that Zions will presumably take to market. Potentially a nice option for publicly traded companies to...
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Extension of 409A Compliance: Why?
The IRS announced today that taxpayers will have until December 31, 2008, to comply with the 409A regulations, which were finalized in April of this year. The initial date of compliance was year-end 2007. The questions I have are these: Did the IRS cave to concerns from so many law...
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Extension of 409A Compliance: What's it mean?
The IRS announced today that taxpayers will have until December 31, 2008, to comply with the 409A regulations. The regs were finalized in April of this year, and had an initial compliance date of year-end 2007. So what does this mean for privately held companies -- our clients and would-be...
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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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Fair Value, Fair Value and Fair Market Value
We’ve talked before about the slow-motion collision between IRC 409A and SFAS 123R. One of our clients is experiencing a three-way collision between standards of value, and to stay compliant it’s rather cumbersome, to say the least. The first time we met Rich, we hit it off. Here’s a guy...
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NVCA against 123R (circa 2004)
Download and read this document. It's interesting, particularly from a historical perspective. This presentation dates back to 2004, in an attempt by the NVCA to stop Fair Value accounting from changing the reporting requirements of privately held companies. I recall a keynote by John Doerr on this issue in the...
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A Must-Read presentation
Business Valuation Resources produced a panel relating primarily to 409A compliance, generally addressed to valuation practitioners. We enjoyed their perspective so much that we would put it on our recommended reading list for all. The guys at Grant Thornton had a great perspective that we’ve seen echoed by many in...
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Final 409A Regs analysis by Nixon Peabody
A nice brief analysis of the final 409A regulations. Overview of changes and recommendations for compliance....
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Final 409A Regs: top 10
Deloitte authored this one, though it was published through the National Association of Stock Plan Professionals. Not much about valuation here, but isn’t it nice to get a Big 4 to boil down a 397 page regulation to a 5 page, 10-point list? I’ll say!...
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Final 409A Regs: a 76-slide “summary”
Think twice before printing this one. It’s a comprehensive analysis of the 409A regulations in their final form. While not the last word on the subject, it was among the first presentations to appear on the subject after the final regs were published. Presented in cooperation between the US Treasury,...
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Final 409A Regs – a redline!
Paul Hastings was the first that we knew of to actually compile and publish a redline of the final 409A regulations. One pertinent section begins on page 38 with the words "presumption of reasonableness." Here’s where you get the valuation safe harbors....
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Final 409A Regs issued today
Here they are. For valuation-related stuff, see pages 28 through 35. For safe harbors, see pages 33 and 221....
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Early 409A Regs analysis by Holland & Hart
Published in 2005, this deck remains a good introduction to the reach of 409A across various equity-like compensation instruments. Detailed and thorough. The valuation stuff appears on slides 50-54....
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409A DIY
This document includes a general discussion of IRC 409A, published by Heller Ehrman in November 2005. It is unique in that it includes a template for the Do-It-Yourselfer that appears to comply with the Illiquid Startup Method described in the Code. See page 8 and beyond for the template. Unfortunately,...
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PWC on 123R
Lengthy -- and surprisingly easy to follow -- discussion of SFAS 123R. History, intent, application and implications are analyzed. Overall an excellent primer. Dated April 28, 2005....
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