Valuation for Financial Reporting Under ASC 805 & ASC 820: A Complete Guide

Every business acquisition triggers an immediate financial reporting obligation – and the quality of that work shapes your balance sheet for years ahead. The purchase price you pay on day one must be carefully allocated; every acquired asset must be measured at fair value, and the resulting goodwill must be tested for impairment every single year.

Done well, this process produces financial statements that investors trust and auditors accept without pushback. Done poorly, it leads to restatements, regulatory penalties, and credibility damage that is difficult to repair.

Over 20,000 deals annually in the United States require ASC 805-compliant purchase price allocation procedures, and approximately 60% of North American M&A transactions include intangible asset allocations as substantial deal components – directly impacting future earnings, goodwill calculations, and impairment tests that affect long-term financial performance.

ASC 805 tells you exactly when valuation is required and what must be measured. ASC 820 tells you precisely how to measure fair value in a way that holds up to audit scrutiny, IRS review, and regulatory examination. Together, they are the complete framework for defensible business combination accounting under US GAAP.

Transaction Capital LLC covers every critical element of ASC 805 and ASC 820 compliance – including the most significant regulatory updates taking effect in 2026 and 2027.

What Is ASC 805?

ASC 805 – formally titled Business Combinations – is the FASB standard that governs how companies account for acquisitions and mergers under US GAAP. Whenever one entity obtains control of another business, ASC 805 applies, regardless of the transaction structure.

The standard mandates use of the acquisition method, which requires the acquirer to:

• Identify which party is the acquirer
  
• Establish the precise acquisition date
  
• Recognize and measure all acquired assets and assumed liabilities at fair value as of that date
  
• Calculate any resulting goodwill – or record a bargain purchase gain when net assets exceed the purchase price
  

This approach replaced the old pooling-of-interests method because it provides a more economically accurate picture of what was actually paid and received. Every line item on the acquired company’s balance sheet must reflect current fair value – not historical cost.

Real-World ASC 805 Application Example

To illustrate how ASC 805 works in practice, consider a straightforward acquisition scenario.

Example:

Company A acquires Company B for $10 million in total consideration.

Component	Fair Value
Tangible assets (equipment, cash)	$2,000,000
Identifiable intangible assets (software, contracts)	$3,000,000
Liabilities assumed	($1,000,000)
Net identifiable assets	$4,000,000
Residual goodwill	$6,000,000

The $6 million in goodwill reflects synergies, workforce value, and other elements that cannot be separately identified and recognized under the standard. This amount sits on the balance sheet indefinitely – not amortized but tested for impairment every year under ASC 350.

Why These Standards Matter

Finance teams consistently underestimate the downstream consequences of inadequate ASC 805/820 compliance. The risks are measurable and often far more expensive to unwind than the cost of doing the work correctly the first time.

Incorrect or incomplete valuation can lead to:

• Audit failures requiring public restatements and SEC disclosure
  
• IRS penalties on transactions with misstated fair values
  
• Shareholder disputes triggered by overstated or understated goodwill
  
• Loss of investor confidence in financial reporting integrity
  

Compliance with ASC 805 and 820 delivers:

• Financial statements that satisfy Big 4 auditors on the first review cycle
  
• Defensible IRS documentation for all tax-related aspects of the transaction
  
• Transparent intangible asset values that support future impairment testing
  
• A clean audit trail that accelerates future financing rounds, exits, or IPO preparation
  

In our experience working with acquirers across technology, healthcare, manufacturing, and professional services, companies that invest in proper PPA valuations upfront spend significantly less time managing audit remediation, regulatory correspondence, and restatement risk afterward.

How Does ASC 820 Define Fair Value Measurement?

ASC 820 – Fair Value Measurement – is the FASB standard that defines fair value and establishes the measurement framework used across virtually every accounting context, including ASC 805 business combinations. Without ASC 820, ASC 805 would have no consistent methodology for determining what “fair value” means in practice.

Under ASC 820, fair value is defined as:

“The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”

Three elements of this definition are critical for practitioners.

• Fair value is an exit price – what you would receive upon selling – not an entry price or the original cost paid.
  
• It reflects assumptions of hypothetical market participants, not the reporting entity’s own strategic intentions or internal plans.
  
• It is measured at a specific point in time, meaning the same asset can have a different fair value in every subsequent period.
  

A key clarification from ASU 2022-03 that remains operative in 2026: contractual sale restrictions – such as a lock-up agreement – should not be considered when measuring the fair value of equity securities subject to those restrictions. A contractual sale restriction is a restriction attributable to the holding entity, not to the security itself, so it does not impact the fair value measurement. This matters significantly for acquisitions involving restricted stock or post-close equity arrangements.

Understanding the ASC 820 Fair Value Hierarchy

ASC 820 organizes valuation inputs into a three-level hierarchy based on observability and reliability. The level assigned to each measurement directly affects the depth of documentation required and the degree of professional judgment that must be exercised and defended.

Level 1 – Quoted Market Prices (Highest Reliability)

Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. These are the most objective inputs available and require minimal valuation judgment.

• Examples: Publicly traded equity securities, US Treasury bonds, listed commodity prices
  
• Audit implication: Minimal documentation required – the market price is self-evidencing
  

Level 2 – Observable Market Inputs (Moderate Reliability)

Level 2 inputs are observable either directly or indirectly but require some modeling and adjustment to apply to the specific asset being measured.

• Examples: Corporate bonds priced using yield curves, commercial real estate benchmarked to market rent comparables
  
• Audit implication: Methodology documentation required, including explanation of adjustments made to observable inputs
  

Level 3 – Unobservable Inputs (Requires Expert Judgment)

Level 3 inputs rely on internal assumptions and proprietary models when no observable market data exists. This is the most complex category – and where the expertise of your valuation professional is most critical.

• Examples: Equity in private companies, customer relationship intangibles, proprietary technology platforms, non-compete agreements
  
• Audit implication: Extensive documentation required, including assumption support, sensitivity analysis, and independent credential verification
  

Most intangible assets acquired in business combinations fall under Level 3. An experienced valuation firm with knowledge of the accounting guidance and expertise in determining fair value of assets in a business combination is required most often.

Financial executives will want a firm that has the personnel and experience in providing purchase price allocation valuations that will withstand scrutiny from audit firms, the Securities and Exchange Commission, and even the Internal Revenue Service.

What Are the Critical Steps in ASC 805 Purchase Price Allocation?

Purchase Price Allocation (PPA) is the core technical exercise under ASC 805. It distributes the acquisition price across every identifiable asset and liability, with any remainder becoming goodwill. Here is how the process works step by step.

Step 1: Calculate Total Consideration Transferred

The total purchase price includes more than just the cash paid at closing. Every form of consideration must be measured at fair value on the acquisition date.

Components of total consideration:

• Cash payments at closing
  
• Fair value of equity instruments (shares, options) issued to the seller
  
• Fair value of pre-existing contractual relationships being extinguished
  
• Contingent consideration arrangements such as earn-outs based on post-close revenue or EBITDA milestones
  

Earn-outs are particularly important to value carefully. If a seller is entitled to an additional $2 million contingent on hitting revenue targets over 24 months, that contingent obligation must be recognized at fair value on day one – not when and if it is eventually paid.

Step 2: Identify and Value All Acquired Assets

Every asset must be classified and measured at acquisition-date fair value. This includes both tangible and intangible assets.

Tangible assets include:

• Cash and equivalents
  
• Accounts receivable and inventory
  
• Property, plant, and equipment
  
• Real estate and leasehold improvements
  

Identifiable intangible assets must be separately valued and include:

• Customer relationships and long-term contracts
  
• Proprietary technology and software platforms
  
• Patents and registered intellectual property
  
• Trade names, trademarks, and brand assets
  
• Non-compete agreements with key personnel
  
• Assembled workforce (under specific circumstances)
  

The intangible asset identification step is where most companies need qualified help. Failing to separately identify intangibles results in overstated goodwill – which creates impairment risk in every future reporting period.

Step 3: Measure Assumed Liabilities

All liabilities taken through the acquisition must be recognized and measured at fair value on the acquisition date.

Liability categories include:

• Outstanding debt and credit facilities
  
• Deferred tax liabilities
  
• Contractual and operating obligations
  
• Contingent liabilities (pending litigation, warranty claims)
  
• Pension and employee benefit obligations
  

Deferred tax liabilities deserve special attention. When intangible assets are recorded at fair value for financial reporting, a corresponding deferred tax liability typically arises because the tax basis of those assets remains at zero – creating a temporary difference.

Step 4: Calculate Residual Goodwill

Once all identifiable assets and liabilities have been measured, goodwill is straightforward:

Goodwill = Total Consideration Transferred − Fair Value of Net Identifiable Assets

Goodwill captures the value of unidentifiable elements: synergies, management quality, assembled workforce (when not separately recognized), and the premium paid for strategic control. It is not amortized under US GAAP – instead, it is tested annually for impairment under ASC 350.

Which Valuation Methods Does ASC 820 Recommend?

ASC 820 endorses three core valuation approaches. Common approaches under ASC 805 include market, income, and cost approaches, selected based on asset characteristics and available data; specific methods are applied where they provide the most relevant measure of acquisition-date fair value.

1. Income Approach: Future Cash Flow Valuation

The income approach estimates value by projecting the future economic benefits generated by the asset and discounting them to present value using a risk-adjusted rate.

Best applied to: Customer relationships, proprietary technology, revenue-generating intangibles, going-concern businesses

Primary methodology: Discounted Cash Flow (DCF) analysis, including the Multi-Period Excess Earnings Method (MPEEM) for customer relationships

Practical example: A customer base generating $2 million in annual net cash flow, with 85% annual retention and an 18% discount rate, produces a fair value of approximately $9-11 million using MPEEM, depending on the growth assumption and contributory asset charges applied.

The income approach is the default for Level 3 assets where no reliable comparable market transactions exist.

2. Market Approach: Comparable Transaction Analysis

The market approach estimates value by benchmarking against prices observed in comparable transactions or by reference to publicly traded comparable companies.

Best applied to: Equipment and machinery, real estate assets, businesses operating in active transaction markets

Primary methodologies: Revenue multiples, EBITDA multiples, Guideline Public Company method, Guideline Transaction method

Practical example: A piece of specialized manufacturing equipment is valued by reference to recent auction results for comparable equipment, then adjusted downward for age differential and functional obsolescence – producing a fair value below replacement cost but above scrap value.

The market approach is preferred by auditors when reliable comparable data is available because it reflects actual market-participant pricing behavior – precisely what ASC 820’s framework requires.

3. Cost Approach: Replacement Cost Analysis

The cost approach estimates value based on what it would cost today to reproduce or replace the asset with equivalent functionality, adjusted for depreciation and obsolescence.

Best applied to: Internally developed software, proprietary databases, specialized equipment without active resale markets, assembled workforce

Practical example: A proprietary SaaS platform built over three years at a total cost of $4 million is valued by estimating current reproduction cost – adjusted for code obsolescence, updated development rates, and competitive technology improvements – resulting in a depreciated replacement cost of approximately $2.6-2.9 million.

How Do You Value Specific Intangible Assets Under ASC 805?

Each category of intangible asset has a preferred methodology under GAAP. Using the wrong method creates audit exposure and can result in restatement requirements.

1. Customer Relationships and Contracts

• Primary method: Multi-Period Excess Earnings Method (MPEEM)
  
• How it works: Project total revenue and cash flows attributable to the acquired customer base. Subtract “contributory asset charges” – returns on all other assets that help generate those cash flows. The residual represents the economic contribution of the customer relationships themselves.
  
• Key inputs: Customer retention rate (typically 80-92% for B2B relationships), revenue per customer, operating margins, attrition-adjusted discount rate
  

2. Technology and Software Platforms

• Primary method: Relief-from-Royalty Method
  
• How it works: Estimate the royalty rate the acquirer would have to pay a third party to license equivalent technology if it didn’t own it. The present value of avoided royalty payments equals the asset’s fair value.
  
• Key inputs: Comparable software licensing royalty rates (typically 2-8% of revenue), technology useful life, revenue attributable to the platform, applicable tax rate
  

3. Trademarks and Brand Assets

• Primary methods: Relief-from-Royalty Method or Premium Pricing Method
  
• How it works: Under relief-from-royalty, estimate the royalty rate for comparable brand licenses. Under premium pricing, quantify the price premium for a branded product commands over an unbranded equivalent.
  
• Key inputs: Brand strength index, market penetration rate, comparable licensing agreements, useful life (finite or indefinite)
  

4. Non-Compete Agreements

• Primary method: With-and-Without Analysis
  
• How it works: Project two separate financial scenarios – one where the seller is free to compete, one where they are restricted. The present value of the performance differential represents the economic benefit of the non-compete restriction.
  
• Key inputs: Market overlap between acquirer and seller, probability that seller would compete, restriction period (typically 2-5 years), discount rate
  

Real-World Startup Acquisition Example

Comprehensive Purchase Price Allocation Example

The following example reflects a technology company acquisition of the type Transaction Capital LLC regularly completes for clients seeking audit-ready PPA reports.

Startup Y was acquired for $8 million in total consideration. Here is the complete PPA structure prepared under ASC 805:

Tangible Assets:

Asset	Fair Value
Cash and equivalents	$500,000
Property and equipment	$500,000
Total tangible	$1,000,000

Identifiable Intangible Assets:

Asset	Valuation Method	Fair Value
Customer Base	MPEEM (DCF)	$2,000,000
Software Platform	Relief-from-Royalty	$2,500,000
Non-Compete Agreement	With-and-Without	$500,000
Total intangibles		$5,000,000

Liabilities Assumed:

Liability	Fair Value
Deferred revenue	$400,000
Accrued obligations	$600,000
Total liabilities	$1,000,000

Summary:

Item	Amount
Total consideration	$8,000,000
Net identifiable assets	$5,000,000
Residual goodwill	$3,000,000

Transaction Capital LLC Prepared a USPAP, AICPA SSVS, and ASC 805-compliant certified report for this engagement. The report successfully passed Big 4 audit review on the first submission, with no requests for additional documentation or assumption support.

What Compliance Standards Must Your Valuation Meet?

A defensible ASC 805/820 valuation report must satisfy several overlapping professional and regulatory frameworks simultaneously.

1. Required Professional Standards

USPAP (Uniform Standards of Professional Appraisal Practice)

USPAP is the foundational standard for all US appraisers. It requires documented methodology, disclosure of assumptions, and adherence to ethical guidelines. Every Transaction Capital report is fully USPAP-compliant.

AICPA SSVS (Statements on Standards for Valuation Services)

SSVS No. 1 governs valuations performed by CPAs for non-litigation purposes, including financial reporting. It mandates specific content in the valuation report – including a clear statement of the appraisal’s purpose, the standard of value applied, and the approaches and methods used.

IRS Revenue Ruling 59-60

While primarily associated with tax valuations, Revenue Ruling 59-60 establishes fair market value principles that also inform ASC 805 of work, particularly in transactions with tax implications. Adherence signals methodological rigor to both IRS reviewers and financial auditors.

2. Auditor and Regulatory Expectations

Big 4 audit requirements include:

• Detailed written methodology explanations for each asset class
  
• Documented support for all significant assumptions (growth rates, discount rates, attrition rates)
  
• Third-party market data validation
  
• Credentials and independence confirmation for the valuation professional
  

SEC expectations for public companies add:

• Enhanced fair value disclosures in quarterly and annual filings
  
• Level 3 asset rollforward reconciliations
  
• Sensitivity analysis for key valuation assumptions
  
• Management representation letters
  

For litigation and legal proceedings:

• Court-acceptable valuation reports with defensible expert qualifications
  
• Availability of expert witness testimony
  
• Complete documentation chain supporting every conclusion
  

When Is Goodwill Impairment Testing Required Under ASC 350?

Annual Testing Requirements

Once goodwill is recorded through a business combination, ASC 350 requires companies to evaluate it for impairment on an ongoing basis. Goodwill cannot be amortized under US GAAP – it must be tested to confirm that it carrying value remains supportable.

Mandatory testing schedule:

• Annual test: At a minimum, once per year on a consistent selected date
  
• Triggering event tests: Immediately when specific impairment indicators occur
  
• Interim assessments: Quarterly evaluation of whether triggering events have arisen since the last test
  

Companies may begin with a qualitative assessment (the “Step 0” option) to determine whether it is more likely than not that fair value has fallen below carrying amount. The FASB’s ASU 2017-04 simplified goodwill impairment testing by eliminating the two-step quantitative test and moving to a single-step approach.

Common Impairment Triggers

Not every business downturn requires immediate goodwill impairment testing – but specific indicators demand prompt action. Finance teams should monitor these categories continuously.

1. Market-Based Indicators

External market signals often provide the earliest warning of potential impairment before operational metrics reflect the change.

• Sustained stock price decline exceeding 20-30% below book value
  
• Sector-wide valuation multiple compression affecting comparable companies
  
• Broad economic contraction reducing long-term growth expectations
  

2. Operational Indicators

Internal business changes that reduce the reporting unit’s ability to generate cash flows originally used to support goodwill.

• Loss of a major customer accounting for 10%+ of reporting unit revenue
  
• Departure of key management or technical personnel
  
• Sustained loss of market share to competitors
  
• New regulatory requirements imposing significant compliance costs
  

3. Financial Indicators

Quantitative performance deterioration that calls prior projections into question.

• Recurring EBITDA or operating cash flow shortfalls versus budget
  
• Multiple consecutive quarters of missed revenue projections
  
• Debt covenant violations indicating fundamental business stress
  
• Requirement to revise long-range financial plan downward significantly
  

Companies should maintain documented procedures for monitoring these indicators and for determining when testing is required. Auditors specifically look for evidence that management is actively evaluating triggering events – not just performing the annual test and moving on.

ASC 820 Disclosures: What You Must Share

Completing the valuation is only part of the obligation. ASC 820 imposes detailed disclosure requirements that must appear in financial statements to support the fair value measurements recorded.

1. Public Company Disclosure Requirements

Quarterly filings must include:

• Classification of each material fair value measurement within the Level 1/2/3 hierarchy
  
• Description of the valuation techniques and inputs used for Level 2 and Level 3 measurements
  
• Narrative explanation of significant unobservable assumptions for Level 3 assets
  
• Rollforward reconciliation showing opening balance, additions, disposals, gains/losses, and transfers for Level 3 assets
  

Annual report requirements add:

• Sensitivity analysis showing how fair values would change under alternative key assumptions
  
• Market risk assessment documentation
  
• Disclosure of the qualifications of independent valuation professionals retained
  

2. Private Company Considerations

Private companies face similar disclosure requirements when preparing audited financial statements, though they are exempt from certain public-company-specific SEC requirements.

Audit documentation needs:

• Complete valuation reports with full methodology and assumption support
  
• Management representation letters affirming the reasonableness of assumptions
  
• Board resolutions approving significant valuations
  
• Third-party market data sources used to validate key inputs
  

Tax compliance documentation includes:

• IRS fair value support meeting Revenue Ruling 59-60 standards
  
• Estate and gift tax valuation reports for ownership transfers
  
• QSBS attestation documentation confirming Section 1202 qualification
  
• Transfer pricing support for related-party transactions
  

What’s Next: 2026 Trends in ASC 805/820 Valuation?

The financial reporting valuation environment is shifting on multiple fronts in 2026. Companies and their advisors need to monitor these developments closely.

1. ASU 2025-03 Takes Effect for 2027 Filings

ASU 2025-03 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted, and the amendments must be applied prospectively to any business combination occurring after the initial adoption date.

2. FASB Is Actively Reconsidering Intangible Asset Recognition

In December 2024, the FASB issued an invitation to comment to seek stakeholder feedback on ways to improve the accounting and reporting associated with the recognition of intangible assets, including the accounting for acquired and internally developed intangibles.

3. AI and Digital Asset Acquisitions Are Creating New Valuation Challenges

Proprietary AI models, large language model training datasets, and infrastructure are increasingly the most valuable assets in technology acquisitions. Standard relief-from-royalty approaches often fail to capture their full economic contribution.

Valuators are developing hybrid income-and-cost approaches with explicit documentation of technological obsolescence timelines. Digital asset valuations are also now governed by ASU 2023-08, which requires fair value accounting for certain crypto assets – making ASC 820 methodology central to crypto-company acquisitions.

4. PCAOB Scrutiny on Level 3 Assets Is Intensifying

Following several high-profile financial statement restatements tied to inadequate PPA documentation, regulators and Big 4 audit firms have increased scrutiny on assumptions underlying Level 3 fair value measurements.

In 2026, expect auditors to request sensitivity analyses, second opinions from alternative valuation firms, and detailed market data support for every significant intangible. Engaging a credentialed, independent firm for every PPA – not just complex transactions – is becoming standard practice.

5. ESG Factors Are Entering Fair Value Measurement

Environmental liabilities, social impact obligations, and governance structures are increasingly influencing both discount rates and long-term cash flow projections. Acquirers in industries with material environmental exposure – energy, chemicals, industrials – now routinely incorporate climate-risk liability analysis into their ASC 805 PPA work. Valuators with GRI and ESG expertise, like the Transaction Capital team, are better positioned to support these engagements.

6. Valuation Timeline Expectations Are Compressing

The market expectation for PPA completion has tightened. Large transactions that once allowed four to six months of post-close work are now expected to close PPA processes within 30-45 days. Specialist firms with dedicated financial reporting teams and streamlined data collection workflows are increasingly preferred over larger generalist practices for mid-market transactions.

Ready to Ensure ASC 805 & ASC 820 Compliance for Your Business?

Valuation errors in financial reporting are costly to fix and difficult to explain to auditors, shareholders, and regulators. The right strategy is to engage qualified professionals before the transaction closes – not after audit questions have already started arriving.

Transaction Capital LLC provides certified, audit-ready ASC 805 and ASC 820 valuations prepared by ABV®, ASA, CVA®, and MRICS credentialed professionals with 15+ years of experience in investment banking and valuation. Our reports comply with USPAP, AICPA SSVS, and all applicable FASB standards.

Turnaround: 2-5 business days. Pricing starts at $500. And you review the draft before you pay.

Contact Transaction Capital LLC today for expert ASC 805 and ASC 820 valuation services.

Frequently Asked Questions About ASC 805 & ASC 820 Valuations

1. What is the main difference between ASC 805 and ASC 820 requirements?

ASC 805 governs when valuation is required – whenever one entity acquires control of another business – and what must be measured (all acquired assets, assumed liabilities, and noncontrolling interests). ASC 820 establishes how fair value is measured, including the three-level input hierarchy and acceptable methodologies. ASC 805 creates the obligation; ASC 820 provides the measurement framework for fulfilling it.

2. What does ASU 2025-03 change about ASC 805 acquirer identification?

ASU 2025-03, effective for fiscal years beginning after December 15, 2026, changes how companies identify the accounting acquirer when the legal acquiree is a variable interest entity (VIE) and the transaction is primarily affected through an exchange of equity interests. Previously, the primary beneficiary of the VIE was always the accounting acquirer. Under the new guidance, companies must evaluate the broader control-focused factors in ASC 805 – which can result in the legal acquiree being identified as the accounting acquirer (a reverse acquisition). This is particularly significant for SPAC mergers and equity-exchange acquisitions.

3. Can our internal finance team perform the PPA without hiring an external firm?

Internal teams can assist with data gathering and preliminary analysis, but GAAP and PCAOB auditing standards strongly favor – and in most audited financial statement contexts effectively require – an independent, credentialed third party. Internal valuations are routinely challenged on independence grounds and often fail to meet USPAP documentation standards. The risk and cost of audit remediation or restatement far outweigh the cost of engaging an external credentialed firm.

4. What happens if we fail to separately identify intangible assets under ASC 805?

Failure to identify and separately value acquired intangibles causes all excess purchase prices to be allocated to goodwill. This overstates goodwill, understates identifiable intangible assets, misrepresents the acquisition’s economic composition, and creates compounding impairment risk in future periods. Auditors will require correction, typically through a restatement with associated public disclosure and investor relations consequences.

5. Does a corporate restructuring or spin-off trigger a new ASC 805 valuation requirement?

Yes. Any transaction in which one entity obtains control of another business – including spin-offs structured as acquisitions, equity reorganizations, and divisional carve-outs – can trigger ASC 805 requirements and create new measurement dates. Post-acquisition equity grants to employees also create separate 409A valuation obligations that must be completed before options are issued.

6. How do you select the right valuation method for each intangible asset?

Method selection follows the economic characteristics of the asset and the availability of market data. Customer relationships use MPEEM because their value is most directly tied to attributable cash flows. Technology platforms typically use relief-from-royalty because software licensing comparables are widely available. Non-compete agreements use with-and-without analysis because their value is inherently comparative. Our credentialed appraisers document their method selection rationale in every report, following AICPA and IRS guidelines.

7. Are Transaction Capital LLC’s reports accepted by Big 4 auditors and the IRS?

Yes. Our reports are prepared in full compliance with ASC 805, ASC 820, USPAP, AICPA SSVS, IRS Revenue Ruling 59-60, and NACVA standards. Every report includes a complete methodology narrative, documented assumptions with market data support, sensitivity analysis where appropriate, and professional credentials – structured specifically to satisfy Big 4 audit requirements and withstand IRS review on the first submission.

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