Valuation principles are simple and easily understood. Determining which of many possible appraisal principles and methodologies is most appropriate in a particular situation is not so clear. Answers to these fundamental questions are often not explicitly spelled out in the final report, and therefore a reader of the report may not realize what the truly key questions should be. An accounting firm's valuation professionals do have this expertise. To sum up then, we believe that valuation information is becoming an ever more important part of financial reporting.
Valuation requires judgment.
The judgment calls of an appraiser should be reviewed by those with valuation background. If the same firm performs the valuation and then audits the numbers, it is highly likely that the so-called 'review' will be more for form than for substance. A change in valuation assumptions will often affect earnings by way more than a penny a share. You have asked for comments on the Costs and Benefits of your proposals. It is our considered opinion that, if your proposals are adopted, costs for Registrants may increase slightly .