Ask an FEI Researcher about. (Resources).

SFAS #141, Business Combinations, and SFAS #142, Goodwill and Other Intangible Assets.

Many resources are now available for those seeking guidance on implementing Statements 141 and 142, and some of these are discussed below:

FASB: Copies of Statements 141 and 142 are available online from the FASB Web site (www.fasb.org) at $13.75 each. Click on "Publications" and go to "Online Ordering."

The FASB also released FASB Staff Announcement, Topic No. D-101, "Clarification of Reporting Unit Guidance in Paragraph 30 of FASB Statement No. 142." The document is available at www.fasb.org under "Final FASB Staff Announcements from the Nov. 14-15, 2001, EITF Meeting."

The Big Five Accounting firms have each produced informative and useful publications. Some examples follow:

Andersen provides an Accounting Reference Series. Its Controller's Supplement, Business Combinations, Goodwill, and Intangible Assets -- the New Rules, has many useful features. The Goodwill Comparison Chart shows how accounting under Statement 142 differs from accounting under Opinion 17 in regards to scope, applicability, recognition, measurement, amortization, impairment, financial statement presentation and disclosure.

Of special interest is the Valuation Specialist Primer. This checklist-format primer contains issues to consider when looking for a valuation specialist or appraiser, determining the scope of the work and evaluating it when the job is completed.

This document is available free of charge as a PDF download from the FEI Web site (www.fei.org); click on "Financial Reporting" at the top of the home page and scroll down to "11/6/01."

KPMG LLP provides a 65-page analysis, Accounting for Business Combinations, Goodwill and Intangible Assets: An Analysis of FASB Statements 141 and 142. This publication is also available as a PDF download from the FEI Web site (www.fei.org); click on "Financial Reporting" at the top of the home page and scroll down to "11/6/01."

Useful features include an eight-page comparison of Statements 141 and 142, with current practices in different areas. It provides good in-depth analyses of the statements, including a chapter devoted to guidance for and examples of new disclosure requirements. It also provides examples of intangible assets that meet the criteria for separate recognition.

PricewaterhouseCoopers LLP has released Shedding Light on the New Business Combinations Rules: A Guide for Deal Makers, which provides insights on what the new rules mean for the overall M&A marketplace, as well as for specific industries. It aims to better position corporate development officers and other dealmakers to address the effects of the new rules on their deal processes.

The study addresses key questions from senior financial executives. A chapter is devoted to analyzing the impact of Statements 141 and 142 on earnings and stock prices, M&A activity and the effects on specific industries. Specifically, it identifies the typical significant intangibles that could be held by companies in 12 key industries, their distinctive life characteristics, the expected resulting incremental earnings dilution and subsequent impairment vulnerability.

This study is available at no charge in a PDF download from PwC's Web site: www.pwcglobal.com/Extweb/pwcpublications.nsf/docid.

Valuation is an integral aspect of Statement 142. and a new book published after the statement was issued is Valuation: What Assets Are Really Worth, John Wiley & Sons Inc., 2002, authored by Alfred M. King, vice chairman of Valuation Research. Of special interest is Chapter 6, "Income Approach to Value," which presents an in-depth discussion of the use of the discounted cash flow (DCF) model for valuing reporting units. Also notable are Chapters 12 and 13, "Allocation of Purchase Price: Tangible Assets" and "Allocation of Purchase Price: Intangible Assets," which discuss non-compete covenants, assembled workforce software, supplier relationships, customer relationships, brand names, and more.

What do financial executives and other decision-makers think of the new rules? The FBI Research Foundation last fall published M&A in the Post SFAS 141 & 142 Environment. Based on interviews with financial executives, analysts, auditors and academics, the report presents expert opinions alerting senior management to the strategic and operational implications for mergers and acquisitions. Order from the FEI Research Foundation Web site: www.fei.org/rfbookstore/PubDetail.cfm?Pub=81.

To view additional information generated from the Ask an FBI Researcher service, visit the FET Web site: www.fei.org/rf.