Valuation for Financial Reporting : Fair Value Measurements and ...

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Endnotes 47Of course, if the impairment test finds that the fair value of the reporting unit hasnot declined materially, no further analysis is required. Increases in goodwill value arenever recognized.ENDNOTES1. Margaret Blair and Steven Wallman, Unseen Wealth: Report of the Brookings Task Force onIntangibles (Washington, DC: Brookings Institution Press, 2001), p. 3.2. International Valuation Guidance Note No. 4, Intangible Assets (2001), at 3.15.3. Financial Accounting Standards Board, Statement of Financial Accounting StandardsNo. 141, Business Combinations (2001), p. 124.4. Margaret Blair and Steven Wallman, Unseen Wealth: Report of the Brookings Task Force onIntangibles (Washington, DC: Brookings Institution Press, 2001), p. 15.5. Michael Mard, Task Force Report to Business Valuation Subcommittee (2000).6. Baruch Lev, Intangibles: Management, Measurement and Reporting (Washington, DC:Brookings Institution Press, 2001), p. 22.7. Ibid., p. 23.8. Estate of Tony Cordeiro, 51 TC 195 (1968).9. Financial Accounting Standards Board, Statement of Financial Accounting Standards No.141, Business Combinations (2001), at A14.10. Ibid., at A14.11. Ibid., at 39.12. Robert F. Reilly and Robert P. Schweihs, Valuing Intangible Assets, (New York: McGraw-Hill, 1999), p. 65.13. International Valuation Guidance Note No. 6, Business Valuation (2000, revised 2005), at5.10.7.14. Ibid., at 5.14.15. Baruch Lev, Intangibles: Management, Measurement and Reporting (Washington, DC:Brookings Institution Press, 2001), p. 39.16. Note, however, that the returns expected on some intangible assets may be below thecompany average for a service business that has mostly intangible assets.17. Financial Accounting Standards Board, Statement of Financial Accounting StandardsNo. 141, Business Combinations (2001), Appendix F.18. Financial Accounting Standards Board, Statement of Financial Accounting StandardsNo. 157, Fair Value Measurements (2006), at 5.19. Internal Revenue Service, Revenue Ruling 59–60, § 2.02.20. Financial Accounting Standards Board, Statement of Financial Accounting StandardsNo. 141, Business Combinations (2001), at 9.21. Ibid., at 13–14.22. Ibid., Appendix F.
48 Valuation for Financial Reporting23. Ibid., at 39.24. The history behind the evolution of the treatment of customer relationships is more fullyexplored in Fair Value for Financial Reporting, Meeting the New FASB Requirements,byAlfred M. King (Hoboken, New Jersey: John Wiley & Sons, Inc.), pp. 143–144.25. Financial Accounting Standards Board, Statement of Financial Accounting StandardsNo. 142, Goodwill and Other Intangible Assets (2001), at 11–14.26. Certain intangible assets do not qualify for such treatment.27. Financial Accounting Standards Board, Statement of Financial Accounting StandardsNo. 157, Fair Value Measurements (2006), Appendix B (formerly Statement of FinancialAccounting Concepts No. 7, Using Cash Flow Information and Present Value inAccounting Measurements).28. Ibid., at 39.29. Randy J. Larson, et al., Assets Acquired in a Business Combination to Be Used in Researchand Development Activities: A Focus on Software, Electronic Devices, and PharmaceuticalIndustries (New York: AICPA, 2001), p. 91.30. Ibid., Introduction, x.31. Ibid., p. 20.32. Ibid.33. Financial Accounting Standards Board, Statement of Financial Accounting ConceptsNo. 6, Elements of Financial Statements, pp. 25–26.34. Randy J. Larson, et al., Assets Acquired in a Business Combination to Be Used in Researchand Development Activities: A Focus on Software, Electronic Devices, and PharmaceuticalIndustries (New York: AICPA, 2001), p. 26.35. Ibid., p. 29.36. Ibid., p. 32.37. Ibid., p. 33.38. Ibid., p. 36.39. Ibid., at 4.2.40. Ibid., at 1.1.08.41. Ibid., at 1.1.16.42. Ibid., at 5.3.29.43. Ibid., at 5.2.08.44. Ibid., at 5.3.11.45. Ibid., at 5.3.33.46. Ibid.47. Ibid.48. Financial Accounting Standards Board, Statement of Financial Accounting StandardsNo. 142, Goodwill and Other Intangible Assets (2001), at 18.49. Ibid., at 30.50. Ibid., at 23, Footnote 16.
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210 IndexBusiness Enterprise Analys
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212 IndexGoodwill (continued )111,
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