The Financial Reporting Blog

Under current US GAAP and IFRS guidelines, the recognition of revenue is based on the probability of collection and the delivery status of promised goods and services. The newer standards allow revenue to be recognized over a period of time and is analogous to the percentage of completion approach more typically used for long-term contracts. This post addresses key components of coming changes.

Dell Inc. engaged in a management buyout (“MBO”) in October 2013 that effectively took the Company private, leaving Michael Dell in control (75% of its stock) with a financial sponsor (25% of its stock). The majority of shareholders tendered their shares, and received the offered consideration. Certain shareholders dissented, setting in motion an appraisal proceeding in Delaware to determine the (statutory) fair value of their shares of Dell Inc. as of the day prior to the merger. This week, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery filed an opinion in In Re: Appraisal of Dell Inc. determining the fair value of the dissenters’ shares. This guest post by Chris Mercer looks to see who the “winners” and the “losers” were in the appraisal action, and in the transaction itself.

Non-GAAP measures can provide useful context around required disclosures for analysts and other users of financial statements, especially regarding management’s perspective on business. Updated guidance from the SEC in mid-May 2016 clarifies its interpretation of rules and regulations on the use of non-GAAP financial measures.

What if every private company had to disclose its financial statements, stockholder list, and other information relevant to valuation to any of its shareholders upon their written request? In this guest post by Z. Christopher Mercer, CEO of Mercer Capital, he discusses Section 220 of the Delaware Code that requires just that.