IRC Section 409A
IRC Section 409A governs all privately-held companies seeking to issue deferred compensation, which includes many types of equity-based compensation (i.e. stock options). The IRC prohibits the issuance of "in-the-money" stock options where the exercise price is below fair market value. Non-compliance can result in penalties, impede institutional financing and hamper potential exit strategies.
Portfolio
Valuation (asc 820)
Portfolio Valuation (ASC 820) — We provide periodic valuations to assist fund and investment managers with their financial reporting requirements. Our extensive experience as investment bankers and asset managers allow us to augment regulatory guidance with practical real-world experiences to arrive at more reasonable mark-to-market valuations.
Gift & Estate Tax
Gift & Estate Tax — We work confidentially with stakeholders and their advisors to develop valuations that adhere to the standards promulgated by the IRS under Revenue Ruling 59-60.
Financial Reporting
(ASC 805, ASC 350, ASC 718)
Companies with GAAP-based financial statements must comply with the guidance set forth in Accounting Standards Codification (ASC) 805, by recognizing and allocating all balance sheet items in an acquisition. This applies to all tangible and intangible assets and is typically referred to as a Purchase Price Allocation (PPA). To remain compliant, any goodwill booked (or indefinite-lived intangible assets), is generally tested at least annually under ASC 350.
Companies that award their employees share-based payments classified as equity are required to recognize the fair value of those awards under ASC 718. The determination of fair value can become quite complex depending on the amount and terms of the grant/awards.