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Transition to IFRS Valuation

 


IFRS is viewed by many as the biggest change (and challenge) in the history of the accounting profession. It is intended to be the new uniform accounting language, designed to ensure financial reporting stories are being told in a directly comparative way, around the world.

Ready, set, go...


Companies making the transition to IFRS are faced with a daunting array of tasks - understanding the differences between GAAP and IFRS, ensuring staff members receive appropriate training, preparing comparative years of financial statements, keeping stakeholders informed about what IFRS means for them…and more.  Based on European and Canadian experiences, transition to IFRS can take two years or longer to implement.  Market leaders, preparing to overhaul technological systems and company infrastructure, are calling upon the valuation profession to provide independent opinions, fixed asset management and transaction consulting services to help implement their corporate strategies for the complex reporting requirements of IFRS.

The time to prepare for IFRS is now.  American Appraisal is here for you.

American Appraisal is a global enterprise spanning Asia-Pacific, Europe, North and South America.  We are a leading valuation and related services firm providing expertise in all classifications of tangible and intangible assets; we are well prepared for the IFRS transition.  Are you?


We are prepared


While IFRS is a prospective change in the United States, it is already a reality for our Clients around the world.  Many of the world’s largest companies, particularly those with significant investments in capital assets, rely on American Appraisal for help deciphering the new standards, establishing fair values and componentizing assets.

We performed valuation and related services for Clients in Australia and the European Union, helping them meet their 2005 deadlines for IFRS transition.  More recently, we’ve been there for Clients in Canada, India and Korea as they prepared for 2011 adoption, and in Mexico as they prepare for 2012.  We continue to work with our global Clients as IFRS evolves and generates new challenges - experience that prepares us to ease your company’s transition to IFRS.

During the years we’ve been providing our global Clients with IFRS-related valuation and advisory services, American Appraisal has also been actively involved in interpreting IFRS for the valuation community.  Our commitment of financial and human capital to the International Valuation Standards Council ensures we maintain a current and thorough understanding of what is required to help our Clients accomplish their goals.  As more countries adopt IFRS, we have

  • Assisted a US subsidiary of a European firm in its acquisition of a naval shipbuilding company by valuing acquired shipbuilding facilities, shipbuilding and service contracts, trademarks, technology and designs, and government customer relationships in accordance with IFRS 3, IAS 38 and IAS 16.
  • Conducted IAS 36-related impairment testing at multiple facilities for a US construction equipment manufacturer.
  • Calculated the fair value of capital assets for a large North American telecom company to assist with IFRS adoption.
  • Assisted with IFRS adoption, prepared annual fair value updates, and valued steel mills and intellectual property in nine countries throughout Europe and North America for Evraz, a Russian metals and mining company.
  • Provided IFRS 3 consulting and valuation services for a European pharmaceutical company in its multibillion-dollar acquisition of a US biotech company.
  • Analyzed eight facilities of Canadian gas company Keyera for initial IFRS adoption, performing additional IAS 16-related componentization of pipelines, buildings, yard improvements and various machinery and equipment classes.
  • Assisted the US subsidiary of a French energy company with several acquisitions, including an $800 million transaction encompassing 16 cash-generating units, by valuing acquired real, personal and intangible assets in accordance with both US GAAP and IFRS.
  • Analyzed and componentized 10 petrochemical refineries, pipelines, distribution, R&D and retail facilities throughout India for an oil and gas company adopting IFRS.
  • Developed a template to assist a Korean car manufacturer with componentizing its North American headquarters.
  • Performed fair value analyses and real and personal property componentization for a Mexican multinational firm with more than 2,000 locations throughout the Americas, Europe and Asia.
  • Componentized tangible assets of breweries in accordance with IAS 16 for the Canadian subsidiary of a Japanese beverage company.
  • Provided fair values of a software company’s technology, customer relationships, noncompete agreements and deferred revenue liability for IFRS 3.


What we do


Do you know how your debt covenants will be impacted by IFRS?  Will your fixed asset records hinder or hasten compliance?  Are you planning to acquire a company?  Have you considered how IFRS will impact your accounting for the acquisition?

If any of these questions gave you pause, it’s time to sit down with American Appraisal.

We can help you minimize and manage the risk component associated with your IFRS conversion.  Our objective analysis of property economics, market drivers and full suite of valuation services will provide you with insights and guidance that are often difficult to obtain.

We are not auditors, brokers or agents.  We are an independent, employee-owned firm with no agenda other than meeting your needs for impartial, substantiated valuations and related services.

Our services relevant to the IFRS conversion include:

Initial and Annual Fair Value Studies
The cost of adopting IFRS is expected to be considerable.  To ease that burden, first-time adopters have the opportunity to

  • Report their assets and liabilities based on fair value rather than historic cost.  For certain assets, even those who continue reporting on a cost basis will be required to disclose fair value within the notes of their financial statements.
  • Restate their financial statements and disclose in the notes whether or not a valuation was performed by a qualified independent Consultant.


Fixed Asset Management
Inaccurate records can blindside you and your organization, heightening strategic, financial and operational risk.  Lack of clarity regarding your fixed assets could cost you more than you might imagine.  In today’s environment of heightened corporate (and company officer) accountability, and with the expected full transparency of IFRS, now is not the time to cut corners.

American Appraisal’s fixed asset management services and best practices have evolved over decades, thousands of engagements and for virtually every sector of the economy, both public and private.  Relative to the IFRS transition, our team of Consultants is well prepared to assist you in meeting the granular reporting requirements for componentization under IAS 16.

Our bench strength, together with American Appraisal’s unique corporate structure, facilitates a nimble response to assignments whether your assets are situated locally or in various locations around the world.  American Appraisal provides the following fixed asset management services:

  • Cost componentization
  • Asset inventory and reconciliation
  • Useful life analyses
  • Property insurance valuations
  • Property record outsourcing


Transaction Consulting
The most challenging areas within IFRS are the changes in M&A accounting, specifically increased use of fair value measurements, treatment of negative goodwill, and changes in accounting for acquisition costs, contingent consideration, and the costs to complete acquired IPR&D.

Our valuation Consultants understand how regulatory authorities want buyers to account for their transactions.  To avoid any unpleasant surprises, buyers should understand IFRS accounting issues relating to the acquisition of tangible and intangible assets prior to closing any transaction.

We can provide preliminary estimates of value and remaining useful life as part of the due diligence process for tangible and intangible assets.  American Appraisal uses proprietary valuation models, industry expertise and knowledge of valuation issues related to financial reporting to assist you in assessing implications of fair value accounting and its impact on your company’s future earnings.
 

Goodwill Impairment
Under IFRS, goodwill is allocated to a cash-generating unit (CGU), as defined within the guidance.  Impairment testing is performed under a one-step approach, where the impairment loss is allocated first to goodwill and then to the other assets within the CGU.


Why us?


If you’re contemplating the engagement of a valuation firm to provide IFRS conversion services, ask yourself:  Which firm is best equipped to provide fair value estimates?  Which firm can provide the required independence?  Which firm has the experience?  When you examine the realities, we think you will find there is only one answer... American Appraisal.


We are well-positioned for IFRS.
We have assisted companies undergoing IFRS conversion/adoption in Africa, Asia, Australia, Europe, North and South America.


We are independent.
American Appraisal focuses exclusively on valuation and related services.  That independence guarantees our greater objectivity.

  • This is our only business.
  • We are independent of audit or other attest services, rating agency, investment banking or other conflicts.

We are experts.
Our Consultants, who have been with us an average of more than ten years, have the experience necessary to value virtually any tangible or intangible asset or business interest.

  • Focused on and committed to valuation since our inception
  • Long-standing support of, and interaction with, IASB, including a current board trusteeship with the International Valuation Standards Council (IVSC) Credentials include ASA, CFA, CF, CPA, CPPM, MAI, MBA, PE, RICS

We are focused on Client needs.
American Appraisal is employee owned.  We aren’t merely involved in valuation; we are unequivocally committed to meeting Client needs.  On every engagement, direct Client access to the firm’s senior management is always the norm, never an exception.

We are glocal.  We believe there is a world of difference between being global and acting global.  We call it ‘glocal’ - the ability to think globally and act locally.

Our consultants are native born and understand the regional market forces that can greatly influence value.  Their familiarity with cultural norms ensures that relevant local factors are adequately considered.  More than 60% of the firm’s employees are located outside North America.


Our locations


American Appraisal, the world’s only truly glocal valuation firm™, comprises 900 employees, operating from offices strategically situated throughout Asia-Pacific, Europe, and North and South America.
 

Australia Greece Poland United Kingdom
Sydney Athens Warsaw London
       
Brazil Hungary Portugal United States
Sao Paulo Budapest Lisbon Atlanta
    Porto Charlotte
Bulgaria India   Chicago
Sofia Bangalore Romania Dallas
  Mumbai Bucharest Denver
Canada New Delhi Timisoara Detroit
Montreal     Houston
Toronto Italy Russia Lisle
Vancouver Bologna Moscow Los Angeles
  Milan St. Petersburg Milwaukee
China Padova   New York
Beijing Pesaro Spain Philadelphia
Guangzhou Rome Barcelona Pittsburgh
Hong Kong Savigliano Bilbao Princeton
Shanghai Torino Madrid San Francisco
Shenzhen   Majorca  
  Japan    
Czech Republic Tokyo Taiwan  
Prague   Taipei  
  Kazakhstan    
France Almaty Thailand  
Paris   Bangkok  
  Netherlands    
Germany Rotterdam Ukraine  
Berlin   Kiev  
Frankfurt      

 

 

 

 

 


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