A survey carried out in the US of 1,500 participants across a range of industries showed that only six percent of companies have assessed how Statement 157 will impact the valuation of their assets and liabilities, even though it takes effect in a few months.
Approximately half of the participants indicated that the requirement to apply exit price vs. entry price when assessing an asset’s fair value would have some effect on their company – but, as yet, many had done little to quantify the impact.
Approximately half also believed that the provisions of Statement 157 will result in the increased use of valuation specialists at their companies.
Deloitte US comments that while Statement 157 provides clearer guidelines for the valuation process, early consideration of its provisions is key. Corporate executives signing off on company financial statements need to ensure that the new rules are adhered to, so that both they and their companies are protected.