Fair Value Measurement, 3rd Edition

CHAPTER 14Fair Value Measurement Case Study¹

LEARNING OBJECTIVES

Dynamic Analytic Systems, Inc. is a fictitious company. The narrative and exhibits in this case study illustrate concepts from the Financial Accounting Standards Board's (FASB) Accounting Standards Codification 820, Fair Value Measurement (ASC 820), FASB ASC 805, Business Combinations (ASC 805), and FASB ASC 350, Intangibles—Goodwill and Other (ASC 350). The case study is intended to provide an integrated illustration of a business combination valuation engagement using the acquisition method and subsequent impairment analysis to illustrate points and provide examples. The case study is not intended to be used for any other purpose. Although the case has been prepared using commonly accepted valuation techniques, there is variation among practitioners within the profession. Others may choose alternative valuation methods and assumptions instead of the ones presented in the case study.

The case study has questions and exhibits intermingled throughout the fact pattern, so that readers can test their understanding of the concepts presented throughout the text. Suggested answers can be found in Appendix 14A, which follows this chapter.

After reading this material, readers should be able to apply the concepts presented in ASC 820, Fair Value Measurement; ASC 805, Business Combinations; and ASC 350, Intangibles—Goodwill and Other. The case study will help readers understand how a valuation professional applies valuation ...