ESOP Valuation

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www.greenerequity.com
Valuation and Consulting Services
Greener Equity performs independent valuation and
consulting services
Greener Equity was founded in 2006 and is now
among the premier valuation firms in the country.
The culture of Greener Equity is to care deeply
about delivering the best possible experience and
value to its clients. 
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Valuation Services
409A Valuation
Summary of What Companies and Their Advisors
Should Know

• IRC 409A became part of the tax code in January
  2005
• IRC 409A broadly applies to deferred compensation
  and, for companies issuing non-qualified stock
  options, 409A creates compliance needs
• To avoid creating a taxable event for employees
  at the time of grant, non-qualified stock options
  must be issued at Fair Market Value
• As private companies do not have an active market
  for their stock a valuation must be performed to
  determine the Fair Market Value
• Given IRS safe harbor presumptions, common
  practice is to engage an independent appraiser to
  provide a valuation report
• Information needed to perform an analysis is
  generally readily available with some minor
  exceptions that are easily prepared
• Expect a valuation to take ten business days or
  less from receipt of the needed information
• Greener Equity asks for ten days, but can move
  faster if needed
• You should not overpay for a valuation

www.greenerequity.com
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Estate Planning
Summary of What Companies and Their Advisors
Should Know

• Individuals are wise to engage highly competent,
  focused counsel and advisors to help them
  navigate an area that requires significant
  subject matter expertise
• Case law evolves in the area of valuation of
  closely held businesses and a valuation firm must
  stay abreast of latest developments to provide
  the best service for their clients
• Appraisers must understand and utilize best
  practices for discounts for lack of marketability
  and discounts for lack of control
• Sophisticated structuring is often the best way
  to optimize for taxes but it requires
  sophisticated advisors who know what they are
  doing, follow USPAP and AICPA guidelines and can
  do so in a cost-effective way
• Information needed to complete a valuation
  includes historical financials, projected
  financials, organization documents, and select
  other items that are typically readily available
• Valuations are completed in ten business days or
  less from when Greener Equity receives requested
  information

www.greenerequity.com
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Purchase Price Allocation ASC 805 (PPA)
Summary of What Companies and Their Advisors
Should Know

• ASC 805 was enacted in the wake of cases of
  massive balance sheet fraud
• Intangible Assets are often a significant portion
  of assets acquired in transactions
• Some intangible assets such as non-compete
  agreements, trade names, customer relationships,
  IPRD, and developed technology have measurable
  value and finite lives and as such portions of a
  purchase price can be allocated to these
  intangible assets and amortized over their useful
  life
• The balance of an acquisition purchase price
  above book value is Goodwill assumed to relate
  to anticipated future financial
  performance/synergy and it is tested annually for
  impairment
• Goal is to make financial statements and their
  representation of intangible assets as useful as
  possible for analysts/investors/acquirers
• As the size of intangible assets relative to the
  overall balance sheet can be significant, the
  best practice is to engage a qualified,
  independent appraisal firm both for the initial
  valuation/allocation post-acquisition and for
  subsequent testing for impairment each year

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Impairment Testing of Goodwill Intangibles
ASC 350
Summary of What Companies and Their Advisors
Should Know

• ASC 350 requires that goodwill and other
  indefinite lived intangible assets need to be
  tested at least annually
• Testing may be necessary more often than annually
  if certain material events occur
• Material change in business or legal situation
• The loss of key people
• A material business or asset sale/disposition
• Any other material impact to inputs around
  assumptions of the value of the indefinite lived
  intangible assets
• Companies can elect either a qualitative test
  (Step 0?) or a quantitative impairment test
  (Step 1 Step 2?).
• The impairment testing must happen at the
  reporting unit level
• Companies should engage an advisor who
  understands their business and can work with the
  companys auditors to ensure seamless testing and
  reporting

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Consulting Services

• Evaluation of Strategic Alternatives
• Due Diligence Support
• Capital Raising
• Transaction Analysis
• Capital Raising
• Transaction Analysis
• Custom Business Intelligence System
  Implementation
• Special Purpose Vehicle Administration

Contact Us
548 Market St. Ste. 48643 San Francisco CA
94104 [phone] accounts_at_greenerequity.com w
ww.greenerequity.com