Tax and Financial Reporting
There are a variety of special tax and financial reporting situations which can require a determination of fair market value or fair value. A few of these include:
- Calculate gain or loss in corporate liquidations in compliance with IRC 331 or worthless stock for deduction under IRC 165;
- Allocate purchase price elements after an acquisition for compliance with IRC 338(g) or 338(h)(10) (Treasury Regulation 1060 and IRS Form 8594);
- Value assets and securities for estate and gift tax purposes;
- Determine the value of a redemption feature (embedded derivative) in preferred stock for reporting under ASC 815 (formerly FAS 133) or of warrants exercisable into this sort of redeemable preferred stock for reporting under ASC 480 (formerly FAS 150) and FASB Staff Position FSP 150-5 (FSP 150-5);
- Value an investment in another entity (variable interest accounting) under the provisions of ASC 810 (formerly FIN 46R);
- Assist management with restating the assets and liabilities to fair value as a company emerges from a reorganization (fresh start accounting) in accordance with ASC 852 (formerly AICPA SOP 90-7).