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Mike Boswell
TriPoint Capital Advisors, LLC

Accounting Alerts

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Pluris Valuation Advisors' Accounting Alerts are published on an irregular schedule, whenever changes are made to accounting standards regarding fair value, or as necessary to alert our financial reporting or portfolio valuation clients to emerging fair value accounting issues.

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August 19, 2014
The use of tranched preferred share issuances (TPSIs), in which a company issues preferred shares and provides for the issuance of an additional tranche or tranches of preferred shares after a contingent event, appears to be increasing.  Pluris has seen an increase in TPSIs by companies in the biotech, technology and Read More...
June 12, 2013
The FASB is expected to take action soon on an accounting standards update (ASU) that represents a complete overhaul of the recognition, measurement and presentation of financial instruments, such as stocks and bonds. A financial instrument can be cash, evidence of an ownership interest in a company, or a contract that Read More...
February 23, 2012
New amendments that take effect in fiscal years beginning after Dec. 15, 2011 will make fair value standards more restrictive for public companies. Major changes include the elimination of the use of blockage factors for any level in the fair value hierarchy, the end of grouping financial assets together under an Read More...
February 02, 2012
The Impact of Convertibles and Detachables on Earnings Per ShareIssuing equity-linked financial instruments, such as convertible debt or warrants, can have an unexpected impact on earnings per share (EPS). The objective of this alert is to review the potential impact on routine equity-linked financing transactions.The way EPS calculations are performed varies Read More...
December 29, 2011
BackgroundThe IASB recently published an Exposure Draft (ED), Investment Entities, proposing an exception to the IFRS principle that a reporting entity must consolidate all controlled entities. The ED proposes that an investment entity measure all controlled investments at fair value, with changes recorded in earnings. To comment on the IASB's ED, Read More...
August 24, 2011
The SEC, FASB and IASB have been busy converging U.S. GAAP with IFRS: In May, the SEC released a work plan for how a transition to IFRS might work, introducing the concept of "condorsement", whereby standards would be converged one at a time instead of all at once. Also in May, the FASB Read More...
August 16, 2011
On July 7, the SEC sponsored an IFRS roundtable to discuss the impact of adopting IFRS in the U.S. The FASB and the IASB are committed to substantial convergence by the end of the year. The FASB’s issuance of ASU 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement Read More...
June 13, 2011
The Congressional Budget Office (CBO) is on a roll to promote fair value accounting. The federal agency that provides economic data to Congress advised lawmakers in May that if they were to use fair value accounting to evaluate the Federal Housing Administration’s Budget, the program would report $3.5 billion in costs Read More...
May 12, 2011
This week, the FASB and the IASB released new fair value accounting measurement and disclosure guidance. The new guidance, set forth in IFRS 13, Fair Value Measurement and as an update to ASC 820, completes a major project of the two Boards’ joint efforts to harmonize IFRS and U.S. GAAP. This Read More...
May 01, 2011
Any public or private company with goodwill on its balance sheet will be affected if new goodwill impairment guidelines proposed by FASB on April 22, 2011 are enacted.Accounting Standards Update: Intangibles, Goodwill and Other (ASC 350): Testing Goodwill for Impairment would change, among other things, the first step in the two-step Read More...
November 28, 2010
Due in part to the credit crisis, the last big wave of acquisitions took place before 1/1/2009, when new accounting rules became effective under ASC 805 (FAS 141R). The next round of buying will be the first time the new rules are tested en masse. At a recent tax conference for Read More...
October 31, 2010
Have you ever wondered why airlines don’t report airplanes on their balance sheets? This question has challenged accounting standard setters for years.Under current rules, each lease is categorized as either an operating lease or a capital lease. In an operating lease, the leased asset is not recorded on the lessee’s balance Read More...
August 16, 2010
PIPE issuers and their advisors have long tried to avoid having to treat securities they’ve issued as derivatives. The task of individually valuing securities, and even embedded features within the securities, every quarter is operationally challenging, time-consuming and expensive. In addition, “fair value accounting” can introduce undesirable levels of earnings volatility. Read More...
June 02, 2010
In its long awaited proposal issued last week, the FASB has expanded fair value accounting to nearly every financial asset. Companies have until September 30 to comment on the new proposal. We expect this proposal to generate a large volume of comments from companies that hold loans, core deposit liabilities, and Read More...
May 19, 2010
Not only did the FASB just expand the fair value option for securitized assets, but the Board added further pressure on reporting entities to use fair value. Entities that elect the fair value option are allowed to skip a complex and time-consuming bifurcation analysis of certain embedded credit derivative features.The new Read More...
April 26, 2010
We see a surprising number of companies that rely on the Black-Scholes-Merton (B-S) pricing model when pricing Private Investment in Public Equity (PIPE) securities – e.g., warrants or the conversion component of convertibles issued in PIPE deals. The difference between a B-S only approach and an appropriate valuation methodology can be Read More...
March 18, 2010
There have been more exciting developments in the world of fair value accounting. The FASB’s tentative decisions would have a significant effect on fair value accounting affecting financial instruments across the balance sheet. In particular, new rules will almost certainly “scope in” many companies that today have NOT elected to fair Read More...
February 21, 2010
At their joint meeting this past Thursday, February 18th, the FASB and IASB made new strides in improving fair value accounting. The Boards discussed fair value accounting for both financial and nonfinancial assets. Two topics were discussed: measuring the fair value of financial instruments and the use of premiums and discounts Read More...
February 03, 2010
In our last Alert, we described how Down-round financings can trigger the late discovery of a derivative that was buried in a previous financing. To recap, if a company issues securities that include certain price protection features, it may need to account for that protection from day one as an embedded Read More...
January 26, 2010
In the latest amendment to ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), many new disclosure requirements will take effect. On January 21, 2010 the FASB issued Accounting Standards Update No. 2010-06, Fair ValueMeasurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements (“ASU 10-06”) affecting all companies that Read More...
October 25, 2009
Recently, we have seen companies execute financing deals for which the fair value accounting implications were not properly understood until after deal execution. Worse yet, we have seen situations in which companies were required to restate their financials because they did not properly apply fair value accounting for certain financings with Read More...
September 27, 2009
In August 2009, the FASB issued ASU 2009-05, Measuring Liabilities at Fair Value (“ASU 2009-05”). ASU 2009-05 is the final rule from the recently proposed FSP FAS 157-f, Measuring Liabilities under FASB Statement No. 157 (“FSP 157-f”). ASU 2009-05 amends ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) to provide Read More...
September 13, 2009
FAS 166, Accounting for Transfers of Financial Assets — an amendment of FASB Statement No. 140 (“FAS 166”), changes the accounting and reporting for transfers and servicing of financial assets and the extinguishment of liabilities. The lion’s share of transactions affected by the new rule is the sale of loans. The Read More...
June 29, 2009
FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (“FSP 115-2”), must be adopted now, in the second quarter. 115-2 introduces new guidance on measuring other-than-temporary impairment (“OTTI”) of debt securities classified as held-to-maturity or available-for-sale. This includes all auction rate securities (“ARS”) that are classified as such. 115-2 Read More...
June 11, 2009
On April 9, 2009, the FASB released FASB Staff Position FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (“FSP 115-2”), which amends current guidance on measuring other-than-temporary impairment (OTTI) of debt securities classified as held-to-maturity or available-for-sale. For most companies, FSP 115-2 must be adopted in the second quarter.IMPACT: Read More...
April 30, 2009
On May 1, 2009 the FASB released proposed FSP 157-f, Measuring Liabilities under FASB Statement No. 157 (“FSP 157-f”). FSP 157-f gives proposed guidance on the fair value measurement of liabilities and applies to liabilities within the scope of FAS 157.The proposed guidance would be effective in the first period after Read More...
April 13, 2009
If you have assets or liabilities that are required or permitted to be reported at fair value, you will be affected by this new rule for your June 10-Q. Early adoption is allowed, so you should make a careful assessment as to whether compliance with the rule’s new disclosure requirements outweighs Read More...
April 08, 2009
If your company was involved in a business combination event in the first quarter that involved the acquisition or assumption of certain assets and liabilities arising from contingencies, youwill be affected by this new rule for your March 10-Q.On April 1, 2009, the FASB issued a final FSP 141(R)-1, Accounting for Read More...
March 30, 2009
FSP Gives Little Guidance, Hurts Companies That Have Been DiligentProposed revisions to the “fair value” accounting standard (FAS 157) would weaken the standard and create inconsistencies in valuations, according to Espen Robak, president of Pluris Valuation Advisors LLC.In a comment letter filed with the Financial Accounting Standards Board (FASB), Pluris said Read More...
March 23, 2009
TWO NEW FSPsOn March 17, 2009, the FASB issued proposed FSP FAS 115-a, FAS 124-a, and EITF 99-20-b, Recognition and Presentation of Other-Than-Temporary Impairments (“FSP 115-a”). FSP 115-a deals with whether impairments of debt and equity securities are considered temporary or other-than-temporary and, for debt securities, requires separate presentation of the Read More...
March 19, 2009
On March 17, 2009, the FASB issued two proposed FSPs: one on fair value measurements and the other on impairments of securities. Proposed FSP FAS 157-e, Determining Whether a Market Is Not Active and a Transaction Is Not Distressed (“FSP 157-e”), gives clarity on how to determine whether a market is Read More...
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