The Financial Reporting Blog

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


Getting Brand Intangibles Right

While it may be natural to assume that brand intangibles are most important in consumer products and services, it is wrong to assume that they don’t matter for finance firms.

Allocation to Goodwill Fell in 2012

Although goodwill remains the largest and most common intangible allocation, the proportion of value allocated to goodwill fell during the past year. Houlihan Lokey recently released its 12th annual Purchase Price Allocation Study, which this year reviewed the intangible asset allocations of 511 transactions during 2012.

Expectations for Step 0 Impairment Testing

The so called “Step 0” impairment test was expected to save firms time and money when it came to testing and reporting their goodwill balances. According to Duff & Phelps, 69% of private companies and 81% of public companies surveyed anticipated applying the Step 0 qualitative test in 2011. One year later, 52% of private companies and 43% of public companies reported actually using Step 0. So what are the issues that keep companies from using the Step 0 qualitative test as expected?

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