The valuation of equity as compensation is a requirement for tax reporting, Internal Revenue Code 409a, and financial reporting, per FASB ASC 718 – Compensation – Stock Compensation.
The task for the valuation professional is to provide an opinion of value of a class of equity of a business enterprise.
To meet the applicable tax and financial reporting guidance, a valuation of the underlying business if oftentimes required before determining a value for the specific class of equity. Analyses for companies with multiple classes of equity can be more complex. In occasions where a business has recently raised capital from independent sources, it may be prudent to use the funding transaction as a proxy for the value of the equity.
Audit and tax professionals refer their clients to Marshall & Stevens for this service because our work stands up to the scrutiny of regulators and meets the applicable audit requirements.
For more information on this or other services, please contact one of the professionals listed below:
