ADVISORY SERVICES
Armslength Advisors provides reliable valuation services for financial reporting, helping businesses meet accounting standards, regulatory compliance, and transparent financial disclosures.
Our Services
In today’s times where retaining and rewarding talent has become imperative for companies, ESOPs have emerged as one of the most popular and important methods of remuneration. Employees receiving some part of their compensation in the form of ESOPs or ‘share based payments’ has become common practice. Generally early stage companies issue ESOPs because they lack the liquidity to pay employees handsome salaries. Moreover, it gives the employees a sense of ownership as well as recognition of their loyalty to the Company. In such cases the companies must observe applicable laws and comply with relevant regulations while offering stock options to their employees.
Purpose
Under IndAs 102, a company that incentivizes its employees with share-based compensation must recognize and report the fair value of those share based awards. The cost of the ESOPs is recognized over the period that the employee provides a service or the vesting period.
Armslength performs valuations of such share-based compensations as per IND as 102, IFRS 2 and FASB ASC 718 and thereby supports the determination of the amount to be expensed in such cases.
When required?
Any kind of business combination viz. merger or acquisition requires a Purchase Price Allocation (PPA) PPA consists of distributing the purchase price among the acquired assets and liabilities. As a part of PPA process, all identifiable intangible assets are required to be analyzed and fair valued.
Purpose of Valuation
Although a PPA is a critical component of accounting, it also what portion of the price paid for the business combination constitute goodwill. To comply with generally accepted accounting principles (GAAP) for financial reporting under IndAs-103, an acquirer needs to report the fair values of the acquired tangible (both monetary and non-monetary assets) and intangible assets. These fair values are recorded on the opening balance sheet post-acquisition and are adjusted regularly to account for depreciation and amortization charges, which reduce the carrying value of the associated asset. Intangible assets with infinite life, such as goodwill, are tested for impairment on at least an annual basis.
Armslength undertakes purchase price allocation exercises to help its clients identify and value tangible and intangible assets including goodwill for tax and financial reporting purposes.
When Required
Business Acquisition
Any kind of business combination viz. merger or acquisition requires a Purchase Price Allocation (PPA) PPA consists of distributing the purchase price among the acquired assets and liabilities. As a part of PPA process, all identifiable intangible assets are required to be analyzed and fair valued.
Purpose of Valuation
Although a PPA is a critical component of accounting, it also what portion of the price paid for the business combination constitute goodwill. To comply with generally accepted accounting principles (GAAP) for financial reporting under IndAs-103, an acquirer needs to report the fair values of the acquired tangible (both monetary and non-monetary assets) and intangible assets. These fair values are recorded on the opening balance sheet post-acquisition and are adjusted regularly to account for depreciation and amortization charges, which reduce the carrying value of the associated asset. Intangible assets with infinite life, such as goodwill, are tested for impairment on at least an annual basis.
Armslength undertakes purchase price allocation exercises to help its clients identify and value tangible and intangible assets including goodwill for tax and financial reporting purposes.
When Required
Business Acquisition
Where an asset that has a fair market price (recoverable amount) less than the value recorded in the balance sheet (carrying value) of an entity, is considered to be impaired. IndAs 36 prescribes the procedures that an entity must apply to ensure that its assets are carried at no more than their recoverable amount. An asset is carried at its recoverable amount if it carrying amount is less than the amount expected to be recovered through use or sale of the asset. In case the amount expected to be recovered from the asset is less than amount it carried at in the books, the asset is described as impaired and IndAs 36 requires the entity to recognize an impairment loss which is the difference between the recoverable value and the carrying amount
Purpose of Valuation
Companies are required to assess, on regular intervals, whether impairment indicators are present. IndAs 36 provides general guidelines as to when an asset should be tested for impairment. One of the critical aspects of IndAs 36 is that it requires the use of fair value measurements for impairment of assets that are not widely traded.
Armslength’s team is well equipped to carry out fair valuation and impairment testing exercises for assets as prescribed in IndAs-36.
When Required
After initial recognition, goodwill and indefinite-lived intangible assets are tested for impairment under Ind AS 36 at least annually, or upon the occurrence of a triggering event.
(Internationally, the impairment testing of such assets are carried out according to ASC 350, IFRS— and USGAAP—-)
Purpose of Valuation
As per Ind AS 36, Goodwill needs to be tested for impairment annually. If goodwill tests positive for impairment on the basis of qualitative factors, then a quantitative assessment of the reporting units must be carried out. The quantitative assessment Can be a complex task taking into account the specific considerations of reporting units.
We, at Armslength, assist managements across issues with respect to impairment testing of goodwill and other indefinite lived assets including:
Assignment of fair values of goodwill, acquired assets and liabilities to reporting units
Recognition and determination of the optional Step 0 qualitative assessment as part of the goodwill impairment test and as part of the impairment test for indefinite-lived intangible assets
Measurement of the fair value of reporting units, including consideration of market participant assumptions and allocation of shared assets
Estimation of the fair value of the debt of the reporting units to derive their respective equity values when the goodwill impairment test is conducted on an equity level
Comparison of reporting unit values to the overall entity value to assess the implied Market Participant Acquisition Premium (MPAP) (a.k.a. control premium) inherent in the reporting unit fair value measurements
Measurement of the fair value of indefinite-lived intangible assets, including IPR&D.
When Required?
A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset (like a security) or set of assets (like an index). Common underlying instruments include bonds, commodities, currencies, interest rates, market indexes, and stocks.
Purpose of Valuation
IndAs-109 requires that all derivative and hedging instruments be measured and recorded at fair value. The standard also gives guidance on derivative and hedging transactions, sets forth the definition of a derivative instrument, and specifies how to account for these instruments. Additionally, many derivative valuations are not done on derivatives specifically, but on financial instruments that have rights that resemble derivatives or “embedded derivatives.”
Armslength undertakes the derivative valuation for financial reporting under IndAs 109 and for impairment testing.
When Required?
As per IndAs 115 an entity shall present the effects of financing (interest revenue or interest expense) separately from revenue from contracts with customers in the statement of profit and loss. Interest revenue or interest expense is recognised only to the extent that a contract asset (or receivable) or a contract liability is recognised in accounting for a contract with a customer.
To determine the transaction price for contracts in which a customer promises consideration in a form other than cash, an entity shall measure the non-cash consideration (or promise of non-cash consideration) at fair value.
If an entity cannot reasonably estimate the fair value of the non-cash consideration, the entity shall measure the consideration indirectly by reference to the stand-alone selling price of the goods or services promised to the customer (or class of customer) in exchange for the consideration.
Armslength undertakes valuation to measure the consideration indirectly by reference to the stand-alone selling price of the goods or services in terms of IndAs 115
FINANCIAL REPORTING SUPPORT
Financial reporting requires transparent, accurate, and standards-compliant valuation analysis to support informed disclosures and regulatory compliance. Businesses must ensure that financial statements reflect the fair value of assets, liabilities, and financial instruments in accordance with applicable accounting frameworks.
At Armslength Advisors, we help businesses, auditors, and stakeholders with reliable valuation solutions tailored to financial reporting requirements. Our team applies recognized valuation methodologies and industry expertise to support accurate reporting, audit readiness, and compliance with accounting standards.
Whether you require valuation support for purchase price allocation, impairment testing, ESOPs, intangible assets, or fair value reporting, we deliver practical and well-supported valuation solutions.
Deliver transparent and standards-compliant valuation solutions.
Support accurate financial reporting and disclosure practices.
Reliable, independent, and professional valuation services.
Connect with our professionals for reliable financial reporting valuation and compliance support tailored to your business needs.
