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The Financial Reporting Blog

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

Regulation A+: Raising the Capital Cap for Small Companies

On March 25, 2015, the SEC issued its final ruling amending Regulation A, an existing exemption from registration requirements for smaller issuers of securities. The new rules, commonly referred to as “Regulation A+,” were first proposed in December 2013 under Title IV of the Jumpstart Our Business Startups (JOBS) Act (subscription required). Regulation A+ is expected to increase access to capital markets for small companies that do not report to the SEC by exempting registration requirements for securities offerings of up to $50 million annually.

Rest and Vest

Estimating the fair value of stock-based compensation and accounting for it properly can be complex. This post discusses the “rest and vest” scenario through the lens of the HBO program, Silicon Valley.

Etsy Goes Public: Another Look at B Corps

The online marketplace Etsy is planning an initial public offering which could raise more than $300 million. It’s also a “Certified B Corporation” which means that in addition to focusing on building shareholder value, the company must maintain certain standards of social and environmental performance, accountability, and transparency. From a valuation perspective, what does this mean?

Why Quality Matters in Valuation for Equity Compensation Grants

For privately held companies (particularly those sponsored by private equity and venture capital funds), getting the valuation process right the first time for equity compensation grant compliance is always the least expensive route in terms of both direct and indirect cost.

Valuation of Contingent Consideration in M&A Transactions

Companies often use contingent consideration when structuring M&A transactions to bridge differing perceptions of value between a buyer and seller, to share risk related to uncertainty of future events, to create an incentive for sellers who will remain active in the business post-acquisition, and other reasons. ASC 805 stipulates that acquiring entities are required to record the fair value of earn-outs and other contingent payments as part of the total purchase price at the acquisition date.

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Travis W. Harms, CFA, CPA/ABV

(901) 322-9760

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Lucas Parris, CFA, ASA-BV/IA

(901) 322-9784

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Sujan Rajbhandary, CFA, ABV

(901) 322-9749

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