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Financial Reporting

ACQUISITION METHOD (Accounting Standards Codification (ASC) 805, Business Combination) including opinions of value of identifiable assets acquired, liabilities assumed, non-controlling interest, consideration transferred, income taxes and related issues. We work closely with the client’s auditors to ensure the valuation process is smooth and efficient, and our valuations have withstood the scrutiny of regulatory agencies such as the SEC and IRS.

IMPAIRMENT TESTING (ASC 350, Intangibles Goodwill and Others, and ASC 360, Long-Lived Asset) in accordance with ASC 350, goodwill and other indefinite lived intangible assets must be tested for impairment at least annually. In accordance with ASC 360, we can analyze for the impairment or disposal of long-lived assets.

VALUATIONS OF DERIVATIVES (ASC 815, Derivatives & Hedging) for many types of derivatives, the valuation process can be simple options to highly specialized and complex, requiring an understanding of the underlying asset on which the derivative is based as well as the terms of the specific contract. (For simple options, a binomial option model may be appropriate since it is flexible and capable of handling both European and American options. For more complex derivatives, a Monte Carlo analysis will be customized to model each specific term accurately.)

EMPLOYEE STOCK OWNERSHIP PLANS (ESOP) valuations, feasibility studies, consideration opinions, fairness opinions and assistance with transaction design and structuring. Our valuations include both those for plan initiation and those required annually under federal law.

STOCK OPTION PLANS (ASC 718) in accordance with ASC 718, various forms of shared-based compensation including stock options, employee share purchase plans, restricted shares and stock appreciation rights are valued.

CHEAP STOCK VALUATION-IRC SECTION 409a for private companies to support option grants for tax purposes, we perform a valuation (for IRC Sec. 409a purposes) that is in accordance with the allocation methods outlined in the AICPA Practice Aid, “Valuation of Privately-Held-Company Equity Securities Issued as Compensation.”

LEVEL 3 VALUATION is needed for private equity and hedge funds to support their fair value determinations of assets that do not have a public market. Management and Boards of Directors can rely on our valuations to support their level 3 value determinations.

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Tax Planning

Hudson Valuation Group provides an opinion of fair market values for the tax planning needs of individuals and business entities. Assets valued include business enterprises, capital stock, debt instruments, warrants, options, partnership interests, and tangible and intangible assets.

INDIVIDUAL SERVICES

• Gift Taxes
• Estate Taxes
• Charitable Donations
• ESOP Tax Valuations
• Income Taxes

BUSINESS SERVICES

• Asset Purchases – allocate the purchase price of a business combination in order to establish tax basis in the legal entity for the acquirer
• NOL Limitation Analyses – IRC Section 382 imposes restriction on the use of corporation’s net operating losses after an ownership change. We provide a valuation of the legal entity to minimize the impact of the limitation on net operating loss carry forwards
• C-Corporation to S-Corporation Conversions – to determine the asset built-in gain at the conversion for potential taxes on asset dispositions
• Forgiveness of Debt – is generally treated as income that must be added to taxable gross income. In the case of an insolvent taxpayer and some other exceptions, a valuation is necessary to prove insolvency or to otherwise quantify the amount that can be excluded from becoming taxable income
• Transfer pricing – including preparation of documentation for penalty protection, economic analysis for advanced pricing agreements (APA) and tax controversy support. Section 482 details specific methods, such as the Service Cost Method (SCM), Comparable Uncontrolled Price Method (CUP), Comparable Profit Method (CPM), and Profit Split Method (PSM), which is critical for setting up transfer pricing system that will satisfy the IRS

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Financial Opinions & Transactions

FAIRNESS OPINIONS based on objective, independent analysis that include not only a valuation, but also a review of the relevant transaction’s financial structure, the type and timing of consideration, and the transaction’s financial and tax consequences. Our professionals have completed fairness opinions ranging from $10 million to over $1.5 billion in market capital.

SOLVENCY OPINIONS for highly leveraged transactions, capital restructurings and debt refinancing. Our experts have provided opinions for transactions ranging from $10 million to over $5 billion in market capital.

CAPITAL ADEQUACY OPINIONS to determine and document whether the fair market value of a company’s assets exceed the liabilities by an amount in excess of a proposed repurchase or special dividend payment. We can provide a capital adequacy opinion either as a freestanding service or as an adjunct to a solvency opinion.

TRANSACTION SERVICES when contemplating an acquisition or divesture, a valuation may be necessary to help determine whether a transaction makes sense from a financial perspective. We have been engaged by boards of companies, trustees, and knowledgeable decision makers, who want trusted business advisor to add in depth background or experience related to a specific business situation.

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Litigation Support

EXTENSIVE EXPERIENCE in litigation support engagements. Our experience includes developing and providing direct testimony in support of client positions, depositions and arbitrations. Our professionals testify before state and circuit courts and bankruptcy court regarding financial valuation matters such as going concern values, corporate equity values, solvency, intangible-asset values, and valuation methodologies utilized.