Fair Value Measurement, 3rd Edition

APPENDIX 14ASuggested Case Study Solutions

THE SUGGESTED SOLUTIONS to Chapter 14's fair value measurement case study are presented in this appendix. The suggested solutions have been prepared using commonly accepted valuation techniques. Recognizing that other valuation professionals may choose different techniques and assumptions, alternative solutions are possible and may have merit. In order to provide clarification, many of the solutions contain references to applicable sections of this book.

The case study and suggested solutions incorporate applicable highlights from the Mandatory Performance Framework for the Certified in Entity and Intangible Valuations^TM Credential and the Application of the Mandatory Performance Framework¹ (Mandatory Performance Framework), which are designed to be used by all valuation professionals who provide valuation services for financial reporting purposes. These key concepts are designated by an MPF → or an AMPF → and include a section citation.

1. You have been engaged by AltoStratus Technology Inc. to perform a fair value measurement of identified intangible assets as of the acquisition date. Discuss the acquisition method. What are the steps in the acquisition method? What is the measurement date of the business combination? What would cause the measurement date to differ from the acquisition closing date?

Under the acquisition method, the fair values of acquired assets are no longer simply determined by an allocation of the consideration ...