Combining its fair-value analysis, the accounting knowledge of Sacher Consulting, and the entity valuation expertise of RP Financial LC, the firm has created ALM First Merger Valuation Services. The services help acquiring credit unions evaluate the pro forma merits of mergers, determine the fair value of business combinations, and quantify the required valuation adjustments for mergers at closing, according to Dallas-based ALM First.
Credit unions can choose from comprehensive valuation, which provides credit unions specific information, explanations and valuations needed to satisfy accountants and auditors, and to finalize a merger or macroview valuation, which provides a view of the credit union's worth as part of the initial step to securing regulatory approval to merge.
Statement of Financial Accounting Standards 141-R (SFAS 141-R) requires greater consistency in the financial reporting of business combinations among all financial institutions, ALM First said. It requires all merging credit unions to use the acquisition method of accounting to record the fair value of the acquired credit union, instead of pooling the balance sheets with no valuation adjustments.
"Since SFAS 141-R took effect this year, many credit unions have found complying with the new accounting rules to be more complicated than in the past," said Emily Hollis, ALM First Partner. "While it's challenging to determine the fair value of the acquiree, ALM First's new service is designed to help credit unions deal with those complexities. By outsourcing valuations, credit unions can benefit from experts focused fully on the merger process."