Fundamental Analysis

Regulatory Guidance

Preliminary factors to consider when identifying the problem to be solved, the Scope-of-Work necessary to solve the problem, and the research and analyses needed to support a credible opinion-of-value.

Uniform Standards of Professional Appraisal Practice -- Standard 9-4

(Analyze the effect on value from each of the following factors when considering both the prospective and retrospective aspects of the enterprise):

The nature and history of the business enterprise or intangible asset.
Financial and economic conditions affecting the business enterprise or intangible asset, its industry and the general economy.
Past results, current operations and future prospects of the business enterprise.
Past sales of capital stock or other ownership interests in the business enterprise or intangible asset being appraised.
Sales of capital stock or other ownership interests in similar business enterprises.
Prices, terms and conditions affecting past sales of similar ownership interests in the asset being appraised or similar assets.
Economic benefit of tangible and intangible assets.

The analysis must include all buy-sell, option and restriction agreements as well as elements of ownership control, liquidity and marketability

United States Treasury Department -- Revenue Ruling 59-60

(Specifically outlined for the valuation of closely held businesses without a public market):

The nature of the business and the history of the enterprise from its inception.
The economic outlook in general and the condition and outlook of the specific industry in particular.
The book value of the stock and the financial condition of the business.
The earning capacity of the company.
The dividend-paying capacity.
Whether or not the enterprise has goodwill or other intangible value.
Sales of the stock and the size of the block of stock to be valued.
The market price of stocks of corporations engaged in the same or a similar line of business having their stocks actively traded in a free and open market, either on an exchange or over the counter.

The examination should include all information (before or after the date-of-value) that would have been known or reasonably knowable as of the date-of-value.

Financial Accounting Standards Board (FASB) -- Authoritative Guidance

ASC 323 - Investments
ASC 350 - Intangibles - (Goodwill and Other)
ASC 360 - Property, Plant and Equipment
ASC 470 - Debt
ASC 505 - Equity
ASC 606 - Revenue from Contracts
ASC 718 - Compensation (Stock based)
ASC 805 - Business Combinations
ASC 820 - Fair Value Measurement
ASC 840 - ASC 842 - Leases
ASC 852 - Reorganizations
ASC 944 - Financial Services - Insurance
ASC 954 - Health Care Entities

The FASB ASC is the single source of authoritative nongovernmental U.S. generally accepted accounting principles. The Codification is effective for interim and annual periods ending after September 15, 2009.