*Economic obsolescence is considered in the fair value measurement, as appropriate
- Allocation of the single point reorganization value and goodwill to various reporting units (in compliance with ASC Topic 350, Intangibles – Goodwill and Other) and legal entities (tax structuring). This step is critical as a material misallocation could result in significant impairment risk for either goodwill or long-lived assets subsequent to emergence.
- Finalize fair value conclusions for all assets and liabilities for inclusion in the opening balance sheet upon emergence, including electronic fixed asset ledgers and other supporting documentation.
- Consider any tax and regulatory requirements associated with legal entities that emerge from the bankruptcy proceedings.
- Work with clients to ensure all accounting and regulatory issues, including all necessary documentation, are met and provide support in responding to auditor questions, SEC comment letters, and IRS and other regulatory requests.
Independent Accounting Advisory
- Application of Fresh Start Reporting – Assist with determining whether the planned reorganization qualifies for fresh start reporting
- Predecessor Entity Financial Statements – Drafting the financial statements and reporting of the predecessor entity, as of and for the period immediately preceding the confirmation date in accordance with U.S. Generally Accepted Accounting Standards (“U.S. GAAP”) and the requirements of ASC 852.
- Successor Entity Financial Statements – Drafting the financial statements and footnote disclosures of the new reporting entity to present and describe the impact of the reorganization plan and the allocation of ‘reorganizational value’.
- “Push-Down” of Fresh Start Reporting – Preparing and executing “push-down” accounting journal entries to apply and record reorganized asset and liability balances on subsidiary and statutory level books and records.
- Technical Accounting Position Papers – Drafting technical accounting documentation and preparing analyses to document the new reporting entity’s judgments and U.S. GAAP accounting conclusions reached in applying fresh start reporting.
- Accounting Policies – Drafting, updating and reviewing accounting policies and procedures for the new reporting entity.
Related Consulting
- Property tax consulting, business incentive advisory, fixed asset ledger reconciliation, and cost segregation studies are some of the other Kroll services that often generate substantial cash savings for our clients and may be completed concurrently with the fresh start valuation process.
Kroll (and its predecessor companies) has advised clients on valuation and corporate finance issues since 1932, earning a reputation as the leading provider of insightful, independent and objective valuation advice.
Contact one of our professionals to learn more about our capabilities and to discuss your specific situation.
