Opportunities and Pitfalls on the Road to the Television Spectrum Auction
Industry Focus: Wireless
Overview:
Many industry participants still have questions not only about the complexity of a two-stage auction (a "reverse auction" to release spectrum currently held by television broadcasters followed by a more conventional "forward auction" in which wireless companies bid on the relinquished spectrum, which will be "repackaged" into contiguous blocks), but also about the underlying basics of the auction. Just what is spectrum? How do the channels allocated to television broadcasters fit into the needs of other wireless communications operators? How much is TV spectrum worth? Download full PDF.
The Evolving Nature of Data Center Valuation
Industry Focus: Technology
Overview:
As the design and construction of data centers has evolved to meet the demands of clients, the current valuation metrics related to building, acquiring, or investing in data center publicly-held companies have also significantly changed. These complex physical assets are getting more attention, and it is critical that owners, investors, and tenants understand the underlying value of the data center facilities. The valuation of data centers is often required for accounting, tax, litigation, acquisition, and economic planning purposes. A well-prepared cost segregation analysis of a data center can result in substantial tax saving. Download full text PDF.
AICPA Working Draft of Practice Aid "Valuation of Privately Held Company Equity Securities Issued as Compensation"
Industry Focus: General Valuation
Overview:
A recent practice aid revision from the American Institute of Certified Public Accountants (“AICPA”) provides considerable clarity for the valuation of equity securities. This draft is of critical importance to digital media and technology companies. First, it provides useful guidance for complying with complex financial reporting requirements regarding equity valuation and executive stock compensation. Second, by prescribing more sophisticated and uniform valuation tools, it may enhance economic decision-making by helping companies to more accurately value their assets and different classes of stock. Download full text PDF.
Reverse Compensation: Broadcaster Networks
Industry Focus: Media and Entertainment
Overview:
With broadcasters receiving ever-increasing retransmission fees from cable multiple system operators ("MSOs") and satellite providers, broadcast networks have recently begun demanding that some of the revenues be returned to them. Often called reverse compensation, or reverse retransmission fees, networks argue that they are entitled to receive a part of their affiliate stations’ retransmission revenue as additional compensation for their network programming contribution. Download full text Pdf.
Update on Retransmission Fees: Pay-TV Provider -> Broadcaster
Industry Focus: Media and Entertainment
Overview:
Retransmission fees were at an all-time high in 2011, and sources say these fees could more than double in the next five years. Broadcasters received an estimated $1.46 billion in total retransmission fees in 2011, and that number is expected to jump to $2.03 billion in 2012, according to SNL Kagan. By 2017, Kagan predicts that industry retrans fees could reach $4.86 billion. Download full text Pdf.
Update on Retransmission Fee Regulation
Industry Focus: Media and Entertainment
Overview:
As disputes between broadcasters and multichannel operators continue, and black-outs of local programming in markets affected by these disputes increase, pay-TV operators are calling for government intervention. Download full text Pdf.
Update on the 2011 Exposure Draft on Revenue from Contracts with Customers
Industry Focus: Media and Entertainment, Newspapers, Cable Television
Overview:
Revenue from Contracts with Customers is a collective effort of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) to reconcile inconsistencies between U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRSs) for revenue recognition. The publication is intended to simplify the accounting process by improving and reducing in number the revenue recognition requirements. Download full text Pdf.
FASB/IASB Proposed Accounting Standards Update for Leases (Topic 840)
Industry Focus: Media, Entertainment, and Communications
White Paper Overview:
The Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board (“IASB”) are developing new standards on the financial reporting for leases which will have a profound effect on both lessees and lessors. As a general matter, lessees will be required to establish an asset and a corresponding liability for leases, in contrast to the current practice in which most leases are simply accounted for as an operating expense. For the time being, leases of intangible assets are not part of the proposed standards. The impact on media and communications companies could be substantial, particularly for those with a significant number of tower or operating site leases. Download full text Pdf.
FASB Staff Position NO. FAS 141(R)-1
Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies
Industry Focus: Media and Entertainment
White Paper Overview:
FASB SFAS 141(R), Business Combinations: requires that companies use the acquisition method to determine the value of acquired assets, assumed liabilities, and non-controlling interests in a business combination. This article focuses on the requirements for identifying acquired assets and assumed liabilities arising from contingencies and also gives consideration to FAS 141(R)-1, which was issued on April 1, 2009. Download full text Pdf.
Statement of Financial Accounting Standards NO. 157
Fair Value Measurements Effective Date (Non-Financial Assets/Liabilities): November 15, 2008
Industry Focus: Media and Entertainment
White Paper Overview
The objective of FASB SFAS 157 is to improve the consistency and transparency of company financial valuation practices as they relate to generally accepted accounting principles (GAAP). These objectives are addressed in three ways. The statement defines fair value, creates a framework for measuring fair value, and defines additional disclosure requirements. The statement improves consistency in the application of valuation practices but at the same time increases the complexity of the financial reporting process. Download full text Pdf.
Statement of Financial Accounting Standards NO. 164
Not-for-Profit Entities: Mergers and Acquisitions
Industry Focus: Public Broadcasting and Not-for-Profit Media
White Paper Overview
The Financial Accounting Standards Board (FASB) issued SFAS 164 to clarify the information presented in the financial statements of a not-for-profit entity when the not-for-profit entity has been involved in a merger or acquisition. The statement defines what constitutes a merger and acquisition and the method of accounting required for the combination. The effective date of SFAS 164 is December 15, 2009. Download full text Pdf.
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