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Tax Consideration

Purchase price allocations performed for US tax purposes are done under the standard of fair market value, which is similar to fair value, but which also may differ in certain cases. Internal Revenue Code Section 1060 and the Regulations under IRC Sec. 338 further identify the following seven classes of assets for tax purposes:

Class I


Class II

Marketable Securities

Class III

Mark-to-Mark Assets and Accounts Receivable

Class IV


Class V

Assets not Otherwise Classified

Class VI

Section 197 (Intangible Assets) Other than Class VII Assets

Class VII

Goodwill and Residual Going Concern Value

These standards have significantly changed the financial reporting procedures applicable to business combinations. In order to be in compliance with these standards it is essential to obtain credible and defensible analyses from qualified valuation professionals with a comprehensive understanding of the issues.

Sigma Valuation Consulting is experienced in providing the necessary valuation services to meet SEC and financial reporting requirements within the framework of ASC 805, ASC 820, and ASC 350.

Reporting Requirements
These variables include:

Business Combinations - FASB ASC Topic 805 / IFRS 3R

Fair Value Measurements - FASB ASC Topic 820 / IFRS 13

Impairment: Goodwill and Other - FASB ASC Topic 350

Impairment or Disposal of Long-Lived Assets - FASB ASC Topic 360

Stock Based Compensation - ASC Topic 718 – FAS 123(R)

Tax Consideration - Internal Revenue Code Section 1060

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