Fair Value Measurements in Financial Reporting
During the past few years, a move towards fair value accounting has taken place, mainly led by provisions of IFRS and. With the use of fair value, financial reporting becomes even more complex as there are few assets and liabilities where a market value can’t be readily established. Instead, companies and their auditors need to rely on valuation models that involve the application of methods and assumptions that can be highly judgmental.

As the fair value has become more and more important as a measurement standard for financial reporting purposes, it becomes increasingly important for auditors to understand the dynamics of fair value measurement and have access to relevant expertise and resources.

SFAI member firm valuation practitioners provide support to audit engagement teams in connection with procedures related to testing fair value measurements that may include:

• Business interest’s valuation
• Tangible assets valuation
• Intangible assets valuation
• Share-based payment valuation
• Business combination/Purchase price allocation
• Impairment Test
• Financial instruments including:
  • Convertible bonds
  • Swaps
  • Guarantee
  • Mortgage-backed securities
  • Asset-backed securities
  • Collateralized debt/bond obligations
  • Transaction Advisory

SFAI can provide in-depth advice to clients in their decision making. Drawing on extensive experience across a broad range of industries, specialized practitioners can provide perspectives on value as well as assistance in interpreting the impact on transaction structuring, deal-making and risk management strategies. Clients can then focus their resources on those factors with the greatest impact on value to make the most efficient use of resources and achieve speed and efficiency throughout the transaction process.

Much private equity, venture capital or hedge funds require an independent valuation of portfolio investments for financial reporting purposes. We can estimate the fair value of investments in accordance with IFRS. Alternatively, we can analyze and report on the reasonableness of management’s internal fair value estimate.

With volatile markets, complex financial structured products and increasing regulation, there is a growing need for accurate and reliable financial modeling and effective risk management models and systems. SFAI can assist with your quantitative valuation and risk modeling needs, including model design and independent risk assessment against the latest industry benchmarks and regulations.