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Dell Appraisal Spawns a Multitude of Valuation Approaches

February 2017 | Issue 84 Introduction A Delaware Chancery appraisal case involving computer company Dell Inc. gave rise to a multitude of valuation measurements.  It is instructive to see how the court sorted through them in coming up with its final appraisal conclusion.  The case is In re Appraisal of Dell Inc., 2016 Del. Ch. LEXIS […] More...

Future Expected Investment Strategy Determines Value of FLP Interest

January 2016 | Issue 83 The estate of Helen P. Richmond held a 23.44% interest in Pearson Holding Co. (“PHC”), a family investment company.  The estate valued this holding at $3,150,000, later adjusted to $5,046,000.  The IRS valued it at $7,330,000.  This difference of opinion was aired in US Tax Court in a case called Estate […] More...

Do Attached Strings Affect the Value of a Gift?

October 2015 | Issue 82 Steinberg v. Commissioner, 145 T.C. No. 7 (Sept. 16, 2015) explores how a contingent liability accepted by a donee can impact the value of a gift for gift tax purposes. Introduction In 2007, Petitioner Jean Steinberg, age 89, entered into a net gift agreement under which she gave her four […] More...

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Accounting Related Valuations

Hempstead & Co. provides fair value advice related to the preparation of financial statements.

Financial officers and auditors turn to us for advice and assistance in carrying out goodwill impairment studies and purchase price allocation studies required in the preparation of financial statements which conform to generally accepted accounting principles (GAAP).  Goodwill impairment and valuation studies are used in the implementation of ASC 805, Business Combinations, ASC 350, Goodwill and Other Intangible Assets, and ASC 360, Accounting for the Impairment or Disposal of Long-lived Assets.

Accountants and financial officers also rely on us for assistance in valuing stock options issued as employee compensation, or for other purposes. ASC 718, Compensation-Stock Compensation, requires that the fair value of stock options be determined for use in preparation of financial statements. Hempstead & Co. is experienced in all of the methodologies used in option valuation, including Black-Scholes, binomial and Monte Carlo.

Officers of Hempstead & Co. serve on the Appraisal Issues Task Force, AITF, a national organization which provides input to the SEC and the Financial Accounting Standards Board, FASB, on accounting-related valuation issues.