SilverMile specializes in providing independent and objective Valuation services for both public and private companies for a wide range of purposes. A precise valuation of an entity or its underlying assets is critical to making astute business decisions that drive growth. In addition to providing a valuation for a business in its entirety, we also value specific business assets such as tangible / real assets, intangible assets, derivatives, convertible notes, etc.
An accurate valuation is of utmost importance to a company. It requires the right blend of analysis, experience and professional judgment. Our Corporate Valuation Advisory team helps companies identify, measure and realize the value of their assets by providing precise and well-supported valuations. These valuations are also very crucial from regulatory and stakeholder standpoints. Our forte in valuations encompasses the following:
Internal Revenue Code (IRC) 409a
A 409a Valuation is an appraisal of the fair market value of a company’s common stock. It is mandatory for every private company to get a 409a valuation done whenever it plans to issue stock compensation to its employees (and on some other few events).
The value of the common stock computed by performing the 409A valuation will determine the strike price of the stock compensation, that must be at or above fair market value.
How we support
Our analysts possess the required expertise to perform 409A valuations. Since regulatory penalties imposed on inaccurate reports are severe, the accuracy of these valuations is of paramount importance. Our analyst team demonstrates the right blend of industry knowledge and valuation expertise to prepare a comprehensive 409a report. We make sure that each and every aspect of the report goes through an exhaustive review process to ensure credibility and accuracy.
Accounting Standards Board (ASC) 820
An ASC 820 valuation defines the connotation of fair value, establishes a framework for measuring it and expands disclosures about fair value measurements. The fair value of the company’s existing types of securities is estimated following the guidelines mentioned in this code.
This valuation is very useful for private equity and venture capital firms, which are mandated by law to value their holdings in unlisted firms, startups and other illiquid assets using a fair value measurement approach. This process is quite complicated and requires specialized knowledge to perform.
How we support
After developing an in-depth understanding of current global market conditions along with detailed portfolio valuation study, including documents like an article of association, term sheets, capital structure, stock purchase agreement and financial statements analysis etc, our analyst provides a detailed ASC 820 valuation which describes the current position of the distinct holdings in a company
Goodwill Impairment (In compliance with ASC 350)
Goodwill is an intangible asset that accounts for the extra purchase price paid by the acquirer arising from the intangible assets being transferred such as intellectual rights, patents, non-compete agreements, licenses etc. of the target entity.
The Generally Accepted Accounting Principles (GAAP) require companies to run a test on the recognized goodwill for impairment periodically. If the fair market value of a company’s goodwill is less than its current book value, then goodwill impairment charges are recorded as an expense in the income statement.
How we Support
We provide the most precise impairment test for goodwill in accordance with the rules of ASC 350. Describing briefly, the following steps are carried out for the same:
• A preliminary qualitative assessment
• Stage one of a quantitative assessment
• Stage two of a quantitative assessment
Following the above steps, we make a decision of whether to impair the goodwill and if yes, then by what quantum. We use our specialized knowledge to value business and their respective tangible and intangible assets
Intellectual Property and Other Intangible assets
Intangible assets are the non-physical assets that can be of immense value to a business. Their valuations are utilized, in particular, for accounting purposes to recognize assets and liabilities at the fair values. The intricate nature of these intangible assets makes specialized knowledge a prerequisite to carry out their appraisal. The ultimate aim is to improve the transparency of acquisition accounting.
The intangible assets can be categorized into the following 5 categories:
• Technology-based intangibles such as software, patents, databases, etc.
• Customer-based intangibles such as customer contracts and relationships.
• Marketing based intangibles such as trademarks, non- compete for agreements, etc.
• Artistic/Creative intangibles such as plays, books, movies, etc.
• Contract-based intangibles such as licenses, royalty, supplier contracts, etc.
How we Support
We provide an in-depth valuation for the intellectual property and other intangible assets of a business. The fair value of intangible assets is estimated in accordance with the guidelines mentioned under ASC 805 and ASC 350. Our clients rely on us to navigate the complexities of these kinds of valuations. The selection and application of appropriate valuation methodologies require an understanding of the constantly evolving best practices in intangible valuations.
Valuation of IP and other intangible assets is increasingly becoming necessary for pre-transaction due diligence for companies evaluating the impact of intangible asset’s amortization on earnings, structuring deals or determining the precise value addition by the target. We provide numerous pre-acquisition valuations of IP and other acquired assets to assist management, deal teams, and corporate boards.
Purchase Price Allocation
Companies engaging in business combinations must comply with the Fair Value accounting principles mentioned under Accounting Standards Codification (ASC 805) and should consider an independent valuation of the acquired assets and liabilities.
Purchase Price Allocation refers to the allocation of the transaction value among the assets acquired, liabilities assumed and any non-controlling interest in the target entity at the acquisition date. The excess of the purchase price over and above these identifiable assets and liabilities is recorded as the goodwill acquired by the acquirer.
All the assets and liabilities are recorded at their fair values. The most commonly identified line items are fixed assets, working capital and intangible assets of the target. Fair value estimation of the intangible assets is most challenging for the companies and they increasingly comprise the bulk of the value acquired in today’s deals.
How We Support
Our valuation professionals provide well-supported, defensible and unbiased purchase price allocations that can stand up to the highest levels of scrutiny. We utilize the following methods to value the intangible assets-
- Multi-Period Excess Earnings Method (MPEEM)
- Relief from Royalty (RFR)
- Cost Approach
- With and Without Method
- Greenfield Approach
- Real Options Method
In-depth analysis and comprehensive reviews are carried out throughout the engagement to ensure accurate value and complying with the highest industry standards. Our ability to understand and determine the accurate allocation of the purchase price has been the cornerstone of our firm’s services.
Connect with our Corporate Valuation Advisory team at [email protected]