The Financial Reporting Blog

A weekly update on financial reporting topics curated by Mercer Capital’s Financial Reporting Valuation professionals.


Cashing In by Checking Out

The motivation behind incentive pay at the startup level is that in order for the employees to strike it rich, the company must succeed by hitting certain milestones. This aligns employees’ personal goals with the company’s overall success. The slight misalignment of this structure, however, can lead to employee turnover at companies.

A Market Participant Perspective on the Size Premium

The traditional method for measuring return premiums is backward-looking. Analysts typically compare realized returns for various asset classes over long historical periods, inferring the premiums from the differences in the return series. With regard to the size premium in particular, this approach has a number of shortcomings.

Blowback from Going Nuclear: Massive Goodwill Impairment Looms at Toshiba

On December 27, 2016 Toshiba Corporation, the Japanese electronics conglomerate, announced the possibility of a goodwill impairment charge related to its U.S. nuclear power plant construction business, specifically, CB&I Stone & Webster Inc. (“Stone & Webster”), which was acquired for $229 million in late 2015 by Toshiba’s Westinghouse Electric Company subsidiary. Both the buyer and target have been plagued by financial difficulties (and goodwill impairment charges) since that time.

Capital Structure in 30 Minutes

Capital structure decisions have long-term consequences for shareholders. The purpose of this whitepaper is to equip directors and shareholders to contribute to capital structure decisions that promote the financial health and sustainability of the company.

Corporate Taxes, Other Pro-Growth Policies, and Business Value – A Brave New World?

The inauguration of a new POTUS is now behind us. Time, then, to add to the cacophony of pop-prognostications. This blog post will make broad observations regarding potential changes to select corporate tax and other pro-growth economic policies in hopes of teasing out inferences for inputs to a basic valuation framework.

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