Financial Reporting Services2018-04-30T15:35:53+00:00

Our financial reporting services include valuation advisory that contributes to financial reporting activities, such as, Purchase Price Allocation, Asset Retirement Obligation, (Asset) Impairment, Fresh Start Accounting, and Asset Reconciliation.

Purchase Price Allocation

Find our Purchase Price Allocation Services here.

Asset Retirement Obligation

Under both IFRS (IAS 37) and US GAAP (ASC 410-20-25-5) an Asset Retirement Obligation provision can be recognized for long lived assets.

The Valuation Company can assist you in estimating the decommissioning costs that would be incurred when disposing the assets and return the site to its original condition.

We can provide the following support:

  • Estimate the current costs for the disposal and clean-up;

  • Estimate the timing of the retirement;

  • Recognize period-to-period increases; and

  • Recognize upward or downward liabilities due course the ARO period.

Impairment Testing

According to IAS 36, impairment of assets seeks to ensure that the assets are not carried at more than their recoverable amount, i.e. economical value less than book value. To meet this objective, companies are required to conduct impairment testing where there is an indication of impairment of an asset. The test may be conducted for a ‘cash-generating unit’ where an asset does not generate cash inflows.

Impairment testing applies to amongst other land, buildings, machinery and equipment, investment property carried at cost, intangible assets, goodwill, investments in subsidiaries, associates, and joint ventures carried at cost, and assets carried at revalued amounts under IAS 16 and IAS 38

Companies are required to assess the assets at each reporting date. Indicators of impairment can both be from external and internal sources.

External sources can be:

  • market value declines
  • negative changes in technology, markets, economy, or laws
  • increases in market interest rates
  • net assets of the company higher than market capitalization

Internal sources can be:

  • obsolescence or physical damage
  • asset is idle, part of a restructuring or held for disposal
  • worse economic performance than expected
  • for investments in subsidiaries, joint ventures or associates, the carrying amount is higher than the carrying amount of the investee’s assets, or a dividend exceeds the total comprehensive income of the investee

Furthermore, when an asset is subjected to impairment, it may be the case that the asset’s useful life, depreciation method, or residual value may need to be reviewed and adjusted.

In case the outcome of the impairment test results in the recoverable amount being less than the carrying amount, it is considered an impairment loss and can be recognized as an expense immediately in the profit and loss.

Fresh Start Accounting

Emerging from a Chapter 11 bankruptcy can be one of the most complex accounting challenges a company may face. One of the required steps in this process is obtaining a valuation of all the assets and liabilities as of the Fresh Start reporting date. We have the broad expertise and specialty of any industry to support you. Our valuation analysis can form the basis for restating your PP&E and liabilities at their Fair Value.

Asset Reconciliation

The computed ending balance is reconciled to the cost and accumulated depreciation balances on the general ledger for each fixed asset class. The total is also reconciled to the total fixed assets, net of accumulated depreciation, per the fixed asset system, as reported on the fixed asset register.

Our Asset Reconciliation service can support you in restructuring your assets present at the facilities, renewing your fixed asset register, and helping you to quickly reconcile the balance sheet with the fixed asset register.