Strategic and valuation advice

In a situation when many companies have assets which have dramatically declined in value, particular emphasis is given to financial reporting and audit of financial statements. Declines in commodity prices and share prices should cause companies to consider with particular care whether financial assets, inventories, long-lived assets, intangibles and goodwill are impaired. Impairment testing in respect of all asset categories will help to avoid unexpected audit results.

Our dedicated Valuation and Strategy Group provides services on estimating fair value of the business and testing assets for impairment and advises on accounting issues and operations in capital markets.

If this is your situation

• You face financial reporting and the audit of financial statements under the current conditions where prices of assets have decreased considerably
• You need to assess whether financial assets, inventories, long-lived assets, intangibles and goodwill are impaired
• You need to carry out impairment testing after the dramatic declines in commodity and share prices
• Your company is obliged to maintain a certain level of financial performance
• Your company is required to comply with the European Transparency Directive
• Your company has assets placed as collateral at carrying value which might no longer be sufficient to meet the loan covenants
• You would like to understand the reasons for potential impairment within the current reporting period

Asset impairment

We advise clients on performing impairment testing, including a ‘headroom’ analysis of the ratio between assets and business value, in order to help management understand how impairment influences financial statements, and define the best time to make an impairment and/or renegotiate loan covenants.

Fair value definition

Identifying fair values can be complex under the current market conditions. We use different valuation techniques, assist with the technical aspects of valuation and share our knowledge of emerging issues and solutions by involving our specialists in capital markets and accounting consulting.

Estimating future cash flows

Estimating future cash flows will require significant judgement and our industry experience means that we have the knowledge to review underlying assumptions.