ASC 820 – Fair Value Measurement

Fair value measurement under ASC 820 is a fundamental requirement of U.S. GAAP that provides a consistent framework for measuring and disclosing the fair value of assets and liabilities. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. These measurements are critical for ensuring transparency, consistency, and comparability in financial reporting across organizations.

Our approach to ASC 820 valuations is grounded in a thorough and methodical process that combines technical expertise with practical market insights. We apply appropriate valuation techniques based on the nature of the asset or liability, including the income approach, market approach, and asset-based approach. Each valuation is tailored to reflect the specific characteristics, risks, and economic realities associated with the subject asset or liability, ensuring that the conclusions are both accurate and defensible.

A key component of our analysis involves the application of the fair value hierarchy, which categorizes inputs into three levels based on their observability and reliability. Level 1 inputs include quoted prices in active markets for identical assets or liabilities, while Level 2 inputs consist of observable data such as quoted prices for similar assets or market-corroborated inputs. Level 3 inputs, which are unobservable, require significant judgment and are typically based on internally developed assumptions. We carefully evaluate and apply these inputs to reflect the assumptions that market participants would use when pricing the asset or liability.

Our valuations are commonly used for a wide range of financial reporting purposes, including purchase price allocations (PPA), valuation of financial instruments, impairment testing, and other complex accounting requirements. We also consider relevant market conditions, transaction data, and industry-specific factors to ensure a well-rounded and supportable valuation outcome.

All of our ASC 820 valuation reports are supported by comprehensive documentation, detailed methodologies, and clearly stated assumptions. This ensures that our conclusions are well-substantiated and capable of withstanding scrutiny from auditors, regulators, and other stakeholders. Our work is performed in alignment with recognized professional standards, including those established by the National Association of Certified Valuators and Analysts (NACVA), as well as applicable U.S. GAAP guidelines, providing clients with confidence in both compliance and quality.